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HR on a shoestring for start-ups

Top tips for SMEs and start-ups setting up HR 

Your quick check-list to ensure you’re compliant:

  • HR contracts for employees and consultants are key
  • HR Policy handbook to cover the detail, make sure you’re compliant and give your team clarity on what you expect and what they can expect from you
  • Pension your start date is likely this year, check it online using your PAYE code now
  • Regular performance discussions don’t need to be onerous or difficult, get into the habit and remember to give feedback
  • Recruit smart and recruit better create an agreed process and use your professional network for help with interviewing if you need
  • Think about training skills-share, networking, shadowing, buddy-system and meet-ups are key to keeping your team’s learning up to date

Running a small business is hard work. When you’re the CEO, IT fixer and tea-maker it’s common for HR stuff to be forgotten. But HR is something that you can’t afford to ignore, as you leave yourself open to the risk of things going wrong with your staff team and in the worst case to nasty claims at an employment tribunal.

Sorting the HR basics now will save you time, money and hassle in the longer-term.

Employment contracts

First off, your company must have contracts for each of your workers. The most important thing is that you define their employment status correctly, i.e. are they an employee or contractor? Remember that employment status is different in employment law and tax law. You will have to pay upfront for these contracts to be developed accurately, but once you have a template of your company’s terms and conditions you may be able to use these for future employees.

HR policies 

Together with the employment contract, HR policies form part of your employee’s written terms of employment. This should include benefits like pensions that your employees are entitled to, arrangements for when they are sick, what happens when employment is terminated, and the processes for disciplinary, performance and grievances. Having a handbook with these processes set out and shared with your employees means that you have a good foundation for managing your employees within the law, but that you also mitigate the risk of being taken to an employment tribunal. You need to get these policies in place as a foundation, and it’s worth the investment as a good document will apply to the whole organisation and should last until any big changes take place.

Hiring new team members

There are a variety of low-cost solutions to recruitment. For general roles, try CV websites like and LinkedIn is important to reach across your network. For entry level jobs try or university jobs boards where you can post vacancies to current and past students in specific disciplines for free. For specific skills try Facebook groups for specific sectors or blogs that recommend other sites.

Remember that flexible working options are very popular with parents looking for back-to-work options, so try mumsnet and local equivalents which have their own free jobs-boards. You can also do your own searching on LinkedIn and there are a number of affordable recruiters if you spend time looking or use a referral.

Save yourself time and money on recruitment by doing phone screenings before interviews. It’s also a good idea to create an interview template, core competencies and a practical interview task which you can alter each time you recruit. Base it around key skills and behavioural qualities needed for your company and save yourself time each time around.

Managing your staff

Developing and training your team doesn’t have to cost the earth. Remember that 70% of learning occurs informally at work by shadowing, watching and coaching. Embed this into your company by setting up an informal mentoring and set up 1 day a month shadowing across your team to make sure this is happening properly.

20% of learning comes from feedback and learning form role models, so make sure you build in feedback loops into your operations.

10% of learning comes from formal training, but this can be done cheaply if you use your network of contacts. You could club together to buy-in formal training providers to share costs.

Prevention is better than cure :get into the habit of having regular 1:1’s with your team to give feedback on their performance and this habit will help to reinforce and ensure that skills aren’t forgotten. Try for once every two months and keep a note of what you agree for the next time.

Create a skills-sharing board where people write down the skills they have that they can help others with. Use your network, chances are that you know someone who wouldn’t mind doing a presentation or learning session as a favour for your team. Encourage your team to go on one meet-up session a month to learn a new skill or shadow someone new and then feed back to the team afterwards. The key part of the learning is evaluation and improvement, so create an easy template for your team to use and review these in regular development catch-ups.

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