Top HR Mistakes Made by New Start-ups

Some business mistakes are minor, only setting you back slightly. These setbacks might even be beneficial in the long run, helping you learn the ropes as you go. However, other mistakes – often HR mistakes – can be more catastrophic for your business. If you don’t follow the correct protocols, your business could get into trouble, and, as a start-up with dreams of success, you definitely want to avoid these. What is the best way to do that? By knowing the most common mistakes going in. 

With seemingly millions of decisions to make to further your business, keeping these top HR mistakes in mind will help you avoid too many challenges. 


New start-ups with little experience in hiring and managing employees often make mistakes related to communication. They often let new staff members get on with working for the business without adequately communicating the workplace policies. This is a failure that can lead to a myriad of issues. If an employee doesn’t know their workload or the workplace policies, it could lead to a lack of productivity and a high turnover rate. 

Providing new staff members with an employee handbook is a good idea to avoid HR miscommunications. Ensure the handbook details all the workplace policies, and get each employee to sign it to show they understand what is expected of them. 

Poor Training 

To keep costs down, many new start-ups only hire talent who already have the necessary skills. While this makes sense, it does mean that those businesses ignore providing training. Or that the training they do provide is sub-par. 

Ultimately, this means that employees do not grow, and their skillset doesn’t match the particular business. On the other hand, offering training means attaining more skilled employees that are loyal to your business – which is far more beneficial for your company’s growth!

Ignoring Benefits Packages

Many start-ups believe they don’t have enough revenue to provide employees with a benefits package. While it’s true that the best benefits packages – like the ones that offer gym memberships and free lunches – might be out of your price range, that doesn’t mean you should ignore them entirely. With employees seeing other roles offering attractive packages, it helps to provide at least a bare minimum package. 

Getting Mixed Up Between Employees and Independent Contractors

One error that could cost you a lot of money is classifying your employees incorrectly. Many start-ups make the mistake of classifying their full-time employees as independent contractors to avoid paying for benefits and certain taxes. This will only do more damage in the long run, as this misclassification can mean you have to pay a lot of money back – far more than you would have had to initially.

Hiring Too Many People

When start-ups see a lot of fast growth, they often get excited and want to adjust their business as soon as possible. Sometimes, that means hiring many people at once. The problem here is that high-volume hiring doesn’t always produce expected results – especially for small businesses that don’t have prior experience in the recruitment process! Many start-ups end up with a bunch of new hires who aren’t fit for the company culture.

Unless demand calls for it, it’s generally better to hire slowly as a start-up to ensure every new employee is an excellent cultural fit while possessing the necessary skills.

Not Hiring Anyone in HR 

Finally, one of the biggest mistakes made by new start-ups is failing to hire a single person in human resources. It makes sense – start-ups don’t usually have much profit to play around with, so business owners often avoid hiring, even when necessary. Unfortunately, this can prove disadvantageous, especially as the business grows.  

By having an HR professional on your side, you have someone who makes sensible people management decisions while ensuring you stay in line with compliance issues. You can even outsource HR to help with costs. Then the professional HR team can handle things like employee retention, performance management, benefits, and more. It will take a load off your back while keeping your employees satisfied. 

Avoid these HR Mistakes for a Smoother Running Business

While it’s natural for new start-ups to make errors, that doesn’t mean you should accept that you’ll make all of them.Especially considering most start-ups fail. You don’t want to be part of that unfortunate statistic!

Knowing the most common HR mistakes and trying to avoid them will help your business thrive in recruitment, retention, and overall employee satisfaction.