HR for Startups is something we know inside out at The HR Booth. Over the years, we have helped hundreds of start-ups and growing SMEs build their HR functions from scratch. We get that launching a new business or scaling up an SME is exciting but also overwhelming, and sorting out your HR can feel like just another thing on a never-ending list. That is exactly where outsourced HR support can step in and make a real difference.
Why HR for Startups is Essential
In the early stages of a business, you might think HR can wait. However, setting up a strong HR foundation early on protects your company, ensures compliance, and creates the right culture from day one.
Small businesses often face challenges like limited resources, lack of HR expertise, and rapid growth. Many founders and directors wear multiple hats, but without a dedicated HR professional, it is easy to make mistakes. Poor HR practices can lead to legal issues, high employee turnover, and a damaged reputation.
What does an Outsourced HR Team provide?
Partnering with an outsourced HR provider means you gain expert support without the cost of a full-time hire. Here are some of the ways outsourced HR for startups can help build your HR function from scratch:
- HR Strategy Development: Outsourced HR consultants will work with you to create a tailored HR strategy that supports your business goals and growth plans.
- Recruitment and Onboarding: HR experts can help you develop job descriptions, run recruitment campaigns, and create effective onboarding processes to give new hires the best start.
- Policies and Compliance: Outsourced HR ensures you have the correct policies, contracts, and handbooks in place, keeping your start up compliant with UK employment law.
- Performance Management: They help implement performance appraisal systems, ensuring staff are motivated, developed, and aligned with business objectives.
- Training and Development: By introducing structured training programmes, your team can continue to learn and grow, boosting retention and productivity.
- Employee Relations: Outsourced HR professionals are on hand to guide you through sensitive issues such as grievances, disciplinaries, or redundancies.
HR for Startups: Where to Start
Getting your HR foundations right from the beginning can save you a lot of time, stress and potential legal issues later on. Here’s a quick guide to the essentials every startup should have in place:
Employment Contracts
Every employee must have a written contract of employment. This outlines the terms of their role, pay, hours, and responsibilities. It’s not just a legal requirement – it sets clear expectations from day one.
Top HR Policies
Start with the core ones: disciplinary and grievance, absence, equal opportunities, and health & safety. These create a fair, consistent working environment and help protect your business.
Storing Employee Records
Keep accurate and secure records for each employee – this includes contracts, right to work documents, training records, and performance notes. Digital systems can help you stay organised and GDPR-compliant. An important aspect of HR for startups.
Employers’ Liability Insurance
As soon as you hire your first employee, you’re legally required to have this insurance in place. It covers you in case an employee gets injured or becomes ill as a result of working for you.
Workplace Pension
Auto-enrolment means you’ll need to provide a workplace pension scheme once you employ eligible staff. Make sure you understand your duties and enrol staff within the required timeframe.
Holiday Process
Set out how holidays are requested, how much leave staff are entitled to, and how you manage busy periods. A clear holiday policy helps avoid confusion and clashes down the line. We also recommend looking at HR software such as Breathe HR. This is a great system that helps you input and track your company holiday calendar online. We are Platinum partners with Breathe HR and can talk you through any questions you have on this.
Company Handbook
Your handbook brings everything together – policies, procedures, values and expectations. It’s a great way to communicate your culture and give employees a point of reference.
Benefits of Outsourced HR for Startups and SMEs
Getting your HR foundations in place is a big step – but you don’t have to do it alone. At The HR Booth, we’ve helped hundreds of startups and SMEs set up their HR function from scratch, making sure everything is compliant, clear, and tailored to their business needs.
Whether it’s drafting contracts, creating policies, or guiding you through pensions and holiday processes, outsourced HR support gives you peace of mind and more time to focus on growing your business. Benefits include:
- Access to experienced HR professionals without the cost of an in-house team
- Flexible support that can scale with your business
- Reduced risk through expert advice on employment law and compliance
- Time savings, allowing you to focus on growing your business
- Building a strong company culture from day one
Choosing the Right Outsourced HR Partner
When looking for HR for startups support, it’s important to choose a provider who truly understands the unique challenges smaller businesses face. Start-ups and SMEs often need a different approach compared to larger organisations – one that’s hands-on, practical, and adaptable to change.
Look for a partner who offers bespoke, flexible solutions rather than a one-size-fits-all service. You’ll want someone who can grow with your business, providing the right support at each stage – from hiring your first employee to managing a growing team.
At The HR Booth, we’ve supported a wide range of new and growing businesses across the UK, giving us a strong understanding of what start-ups and SMEs really need from their HR function. We take the time to get to know your business and tailor our support to match your goals and values. Whether you need help with contracts, policies, compliance or day-to-day HR advice, we become an extension of your team – without the overheads of an in-house HR department.
With our approachable team, real-world experience and commitment to long-term partnerships, we’re a trusted choice for HR for startups who want things done right from the start.
Outsourced HR Costs for Startups Compared to In house Support
At The HR Booth, our HR Retainer package for businesses with up to 10 employees is just £159 per month – that’s £1,908 a year. For less than the cost of a single hire, you gain access to an entire team of HR professionals, ready to support and drive your HR function forward.
Our team includes two Senior HR Consultants, five HR Consultants, a dedicated HR Assistant, and a HR Administrator – all working together to provide expert, tailored support when you need it.
To put this into perspective, the average salary for a single in-house HR Consultant is £41,398 a year (Glassdoor). By outsourcing, you’re not only tapping into a broader range of expertise, but you’re also avoiding additional employment costs such as National Insurance contributions and other overheads.
It’s a smart, cost-effective way to get your HR right from the start – without the burden of a full-time salary.
Final Thoughts
Investing in HR for startups by partnering with an outsourced HR provider is one of the smartest decisions you can make. It ensures your HR foundations are solid, reduces risk, and supports sustainable growth. With the right HR support, your start-up or SME will be well positioned to attract talent, retain employees, and achieve long-term success.
If you are a start-up or SME looking for expert support to build your HR function, get in touch today to find out how we can help your business thrive.
