Do I Really Need an HR Department? Four HR Tips for Startups

Rianne Hunter

April 02, 2014

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Many start-ups grapple with the decision as to whether they should create a human resources (HR) department. Perhaps a CEO is unsure of whether a start-up will be profitable and may be hesitant to spend extra money in hiring people to run an HR department. Instead of deciding whether to cut an HR department completely, there are some helpful alternatives that start-ups can implement to save money. Web-based HR software can cut down on the number of employees that a start-up needs to employ for its HR department. Here are some reasons your firm shouldn't completely discount using an HR department and should perhaps consider alternatives to cut costs.

1. Knowledge of Employment Laws

Legal compliance is one of the top reasons your company should employ at least one or more individuals for its HR department. Instead of hiring a whole staff of human resources professionals, you can opt for hiring just one or two people. You can compile all of the relevant legal regulations affecting your company and store them on HR software. You can also set up the software to contain alerts and reminders for HR professionals.

2. Knowledge of Corporate Policies

An HR department is also important for its knowledge of corporate policies. Typically, an employee must defer to an HR department if he or she has a concern about a company policy. The HR professional is an objective person that can provide confidential advice to the employee. You can also upload all of your company's policies onto software to minimize the workload of an HR professional.

3. Retain More Employees

Employees feel more comfortable in a workplace in which they can consult with a human resources department. An employee is less likely to quit his or her job if he or she can sort out a conflict with an HR professional. It is important to provide at least one person for employees to discuss concerns with in the workplace. Your start-up will likely see a retention of revenue-generating employees if at least one HR employee is hired.

4. Provide Support to Employees

HR personnel can also provide support to employees during difficult times. If an employee is facing an illness, he or she can learn about rights that he or she may have under the Family and Medical Leave Act (FMLA).

Start-ups should not completely dismiss the idea of hiring HR personnel. Instead, web-based programs now give start-ups an opportunity to downsize the number of HR professionals that they hire.