Last Updated 05 Jul 2021

Should a Startup Hire an HR?

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Startups at nascent stage, are small, simple and ambitious! They are yearning to become big and hence set ambitious goals for their employees.   But amidst all the noise and the pressure to financial targets, where does an HR fit in a startup environment?

Startups are often seen to employ executives with dual roles, one being that of a human resources officer.  This probably works well when the employee strength ranges between 5-10 people. But in cases, where the headcount count exceeds that number, it’s a tedious task to carry out the work of an HR and another important job role in the same organization.

From hiring, admin work, doing checks on employee issues related to travel, expenses and paperwork – an HR is the go to person!

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We asked startups as to whether they need an HR and how did they go about forming an HR arm for their organization.

“You always need a HR team in place. The team can be divided into people operations and people development. As soon as a startup crosses 10-15 people team, they would need to make sure that the people operations is followed. People development on the other hand, since it happens on a monthly or quarterly basis should be a part of the KRA of the leadership and senior management team directly,” Rahul Garg, CEO and founder at Moglix said.

Why exactly do startups need HRs?

Bigger MNCs might find it easier to pitch a separate department all together, for startups it’s another addition to costs that they need to take up on themselves.  Saumil Majmudar, Co-founder and MD at EduSports explains as to why it makes sense to have an HR! “IN the early stages, the founder(s) need to take on the strategic HR role and consider outsourcing the transactional part so that they stay focussed. As the team grows, there is a need for an HR team in place as the number & quality of transactions increase, the founders also take on specific functional roles (say, product, tech, biz dev, mktg etc) – and HR can end up getting neglected.”

When should one hire an HR for his startup?

“... in a start-up with a team size of less than 30 individuals, an HR team isn't really necessary. Since it is the founder who drives the culture and values of the place, s/he would prefer to invest in hiring individuals who have the same passion as s/he does. The risk of hiring an HR team at the nascent stage of a start-up could be that individuals who get hired might meet the HR team's criteria as opposed to what the founder has in mind. Unless of course, the cascade has been effective.This said, this means that it is crucial for the founder to have a sound understanding of people skills so that the right structure can be created before getting an HR Team on-board,” Asif Upadhye, Director, Never Grow Up said.

Some entrepreneurs agreed that at the initial stage entrepreneurs themselves could take up these duties, however it’s important to hire a professional HR hands once the startups decides to expand.

During the initial days the founding members of the company involve themselves in the recruitment process. Once the team becomes big enough there usually are managerial issues that pop up during the recruitment. The relationship that the old ones/existing team members share with the founding team has the potential of creating a divide between the old and the new ones  This is the craft that the entrepreneurs need to know (i.e.) how to slowly distance and bring the processes to manage the day to day operations than interpersonal relationships. Initially for the ‘original’ team the HR responsibility is usually and can be outsourced with a minimal budget. But once the original team is formed, a separate budget should be assigned for the next team to ensure that all the employees are engaged unilaterally,” Madhusudan Namboodiri, Co-Founder and Director, BiBox.

Subscription based HR services

According to Shaifali Agarwal Holani, co-founder, CEO at EasyFix, an HR is really not required when the team primarily consists of co-founders and founders. “If entrepreneurs can draft an impactful job description and be precise with their recruitment requirement then multiple free and subscription based recruitment portals come handy,” she adds. EasyFix is a 450 people organization spread across 60 cities and runs without a dedicated HR as they bootstrap!

Should an HR at a startup don multiple roles?

Since startups have the tendency to have a flat structure, an HR could also diversify his/her roles to become a people’s manager or basically the “go to person” for anything related to work life issues.

“...Startups should create a position like people manager who has the responsibility to engage employees well with company objective and goals. As it is quite necessary to foster a sense of individualism and entrepreneurial spirit among the employees, who in a startup constitute a small group, which in turn, helps inculcate a responsible work culture for the people involved in the projects,” Anup Sahoo, Founder of Ideapoke.

For a regular professional working at an MNC, the world of startups appears to be slightly dis-organized as compared to a larger corporate house. The availability of an entire team dedicated to HR work, is considered a luxury.  Multi-tasking and subscription-based models are some of the alternatives sought by entrepreneurs.


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