12:00 AM, December 27, 2019 / LAST MODIFIED: 12:00 AM, December 27, 2019


Human Resource is the most valuable asset for any company. However, a dedicated HR department is rarely found in startups and small businesses. This might lead to a few issues for those businesses. They must keep in mind a list of dos and don’ts to ensure that they do not face any such issues while operating their businesses.

The first thing to do is to develop a company policy regarding common issues such as recruitment, compensation and workplace etiquette. Without an HR department, a company can go about solving these in three ways.

Firstly, they must appoint one or two senior level employees to look after common HR needs such as developing policies and executing HR functions. They can have other roles as well, but they will simultaneously look after the HR. Secondly, the company can hire two to three dedicated employees for handling HR functions; they will basically constitute a small HR department for the organisation. Since, having a full-fledged HR department with dedicated roles for separate activities is not feasible for such businesses, each employee needs to look after multiple HR functions. Finally, the senior management can sit together and finalise some fixed policies and then the department heads will look after their own HR needs whenever needed following the company policies.

The bottom line is, irrespective of the path chosen by the company, a solid policy needs to be in place for people to follow in each and every aspect of the HR functions. There are a few important policies to keep in mind.

The eligibility criteria of the recruitment must be specific with details of the job description and requirements. Vague terms are likely to attract unwanted candidates. The compensation packages must be specified along with bonuses and increment policies. It is wise to keep in mind that unpaid internships and probationary periods longer than 3 month are likely to have negative impacts on employee motivation and performance. There should be separate and concrete guidelines regarding workplace discrimination and harassment, as these need to be handled meticulously. Other important policies include total annual leave allocation and minimum office hour requirements, which can be monitored to measure employee performance. Employee evaluation methods should also be measurable and as objective as possible, since these decide bonuses, increments and promotions.

With the availability of online resources and software, it has become very easy to maintain employee records and profiles. Hence, functions can be managed very easily nowadays, allowing startups and small businesses to function effectively without a comprehensive HR department.

The guidelines mentioned in the article are mostly for companies with around 50 employees. If the number exceeds that, there arises a need for employer branding, which requires a bigger team. Regardless of size, it is wise to incorporate information systems in the company to easily regulate and monitor all HR related activities.

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