Early-stage startups tend to focus on building the product, landing customers, and keeping the lights on. HR strategies rarely take center stage—understandably so. But even with just a handful of team members, putting a few HR fundamentals in place early can save you time, cut unnecessary costs, and make it much easier to scale when growth picks up speed.
Without basic HR systems in place, even the most promising startups run into avoidable roadblocks: hiring delays, legal missteps, or a company culture that drifts off course. Following a clear HR checklist can help you address these challenges early without the need of an HR department or HR professionals.
This step-by-step HR checklist walks you through the essentials—starting with hiring, including compliance, and even culture-building—so you can build a team that scales with your business in 2025 and beyond. Here's an HR Checklist for Startups:
Step 1: Define Your Startup’s Vision, Mission and Values
Before you write your first job ad or send your first offer letter, get crystal clear on why your startup exists and how you work.
Your vision sets the long-term direction, your mission defines the purpose, and your core values shape how people behave inside the company. Together, they're what hiring decisions, team alignment, and day-to-day operations are based on.
Why it matters:
- Candidates want purpose-driven workplaces—especially younger generations. In fact, 50% of Gen Z employees have turned down assignments or projects because they conflicted with their personal ethics or beliefs.
- Values help you screen for fit beyond just skills.
- Clear mission equals fewer culture mismatches down the road.
Tip: Don’t just write them—use them. Refer to your values in job interviews, onboarding, and feedback conversations.
Gen Y vs. Gen Z vs. Gen Alpha: Key Differences for HR →
Step 2: Create a Basic Org Structure
You don’t need a full corporate hierarchy—but you still need clarity. A simple org chart helps everyone know who does what, who reports to whom, and where future roles might be needed.
Start with:
- Key functions (e.g., Sales, Marketing)
- Current team roles and responsibilities
- Reporting lines (even if informal for now)
Even a simple framework helps clear up misunderstandings, prevent duplicate activities, and begin the process of planning out scaling.
Since you're starting up, you can just assign C-levels to each department. So you'll need a CMO, a CTO, a CFO, and such. If you're raising capital, you can always take in a fractional CFO instead of a full-time CFO.
Tip: Include future roles you plan to hire. This will make workforce planning and budgeting easier as you grow. Implement HR software with people management features to make this less stressful.
Step 3: Set Up Legal and Compliance Essentials
Before your first hire, make sure you’re legally ready to employ people. Skipping these steps can result in fines, lawsuits, or worse.
Checklist:
- Register your business (LLC, C-Corp, etc.) and get an EIN from the IRS
- Set up business insurance (e.g., workers’ comp, general liability)
- Understand employment classifications (W-2 vs. 1099 contractors)
- Draft compliant employment contracts or offer letters
Misclassifying employees or failing to meet local labor laws can lead to serious penalties. When in doubt, consult a legal or HR expert—especially if you're hiring international contractors.
Tip: Use software tools for built-in compliance support if you're short on internal resources.
Step 4: Build Your Hiring Process
Hiring doesn’t have to be complicated, but it does have to be consistent, legal, and aligned with your company’s values.
Start by creating clear, compliant job descriptions that reflect what the role truly requires. Avoid jargon and stay away from language that could be unintentionally biased.
Next, choose a basic ATS (applicant tracking system) or even a spreadsheet if you’re hiring infrequently. The goal is to track applicants, avoid resume pileups in your inbox, and move candidates through a consistent process.
Also, it's important to start using fair hiring practices right away. This means having structured interviews, using the same criteria for judging, and being transparent about the salary from day one.
Tip: Even if you’re just hiring your first few team members, document your steps.
Step 5: Create an Offer Letter Template
Once you’ve found the right candidate, a clear and professional offer letter seals the deal and minimizes misunderstandings.
Your template should include:
- Job title and reporting line
- Start date and work location (remote/hybrid/in-office)
- Compensation details (base salary, bonus structure, equity if applicable)
- Benefits summary
- Conditions (e.g., background check, probation period, at-will status)
Standardizing this document saves time, secures legal clarity, and presents your startup as credible and organized.
Tip: Keep a version ready for full-time employees and another for contractors, as each requires different terms.
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Step 6: Prepare a New Hire Onboarding Workflow
First impressions matter—and it shows. A 2024 Deloitte report states that early one-third of new hires leave within their first 90 days. That’s why a structured onboarding process is key to helping new employees feel confident, connected, and productive from day one.
Start with a simple onboarding workflow that covers:
- Pre-start setup: Send a digital welcome kit, confirm Day 1 logistics, and give access to tools
- Day 1 and Week 1: Schedule intro meetings, product demos, and quick wins
- First 30–90 days: Outline role expectations, goals, and check-in points
Step 7: Choose Your Payroll System
Whether you’re paying one person or ten, get a payroll system in place early.
Look for tools that:
- Automate payroll tax filing (federal, state, local)
- Handle direct deposit and W-2/1099 forms
- Integrate with accounting platforms like QuickBooks or Xero
Tip: Even if you’re bootstrapped, don’t DIY payroll manually—it’s risky and time-consuming.
Step 8: Define Compensation and Benefits
Compensation is your promise to employees. Building a transparent, competitive package helps you attract and retain talent in a tight hiring market.
Start by:
- Researching salary benchmarks (use tools like Levels.fyi, Pave, or industry reports)
- Defining your comp philosophy: Do you lead the market? Offer equity? Use remote-based or location-based pay?
- Choosing basic benefits: Health insurance, unlimited PTO, retirement benefits, wellness stipends, and parental leave are common even for lean teams
You don’t have to match big-tech perks, but clarity and consistency go a long way.
Tip: Document your approach now—even if it’s simple—and evolve it as you grow.
Step 9: Draft Key Company Policies
Even in a small startup, people need guardrails. Clear company policies reduce confusion, protect your business, and help everyone understand what’s expected.
Start with the essentials:
- Employee handbook: Your go-to document for workplace expectations, benefits, and procedures.
- Code of conduct: Sets the tone for behavior, ethics, and how your team treats one another.
- Leave and remote work policies: Outline time-off processes, eligibility, and expectations for distributed teams.
- Data privacy policies: Especially important if you’re handling customer or employee data.
Tip: Keep it simple. Use plain language, not legalese, and make your policies easy to update as your startup evolves. Take advantage of AI policy generators.
Step 10: See to HR Compliance and Collect Documents
As soon as you hire, you’re responsible for certain legal forms and records.
Follow this HR compliance checklist as you make sure you:
- Collect required documents like I-9s.
- Store them securely and accessibly, whether in a digital HR system or an encrypted drive
- Adhere to appropriate document retention guidelines—certain forms need to be retained for a long time.
Tip: Set up a checklist for every new hire so nothing slips through the cracks.
Step 11: Track Time, Attendance and Leave
Whether your team is hourly, salaried, or hybrid, it’s smart to start tracking time off and attendance from the beginning.
Choose tools that can:
- Log paid time off (PTO), sick leave, and holidays
- Track hours if you employ non-exempt workers
- Sync with your payroll system
Even if you trust your team fully, a system keeps things fair, transparent, and legally compliant.
Tip: Use tools like TalentHR that offer time-off tracking and time-tracking tools within a centralized system, even from an HR mobile app.
Step 12: Promote a Culture of Recognition and Feedback
Early-stage startups often skip formal feedback—but that doesn’t mean people don’t need it. Building a culture of feedback and praise helps keep morale high and work on track.
Start small:
- Hold regular 1:1 check-ins with team members
- Celebrate wins, big or small, with simple shoutouts or Slack kudos
- Ask for feedback from employees, too
Tip: Recognition doesn’t need to cost anything. A thoughtful message from a founder can be more powerful than a bonus.
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Step 13: Establish Performance Management Basics
Performance management doesn’t need to be formal or time-consuming—but it should be intentional. A simple system helps align your team, track progress, and keep everyone focused on what matters most.
Start with:
- OKRs (Objectives and Key Results) or KPIs (Key Performance Indicators) to give teams clear goals
- A lightweight review process, like quarterly check-ins or self-assessments
When people know what success looks like, they’re more likely to reach it.
Tip: Keep it informal at first. A short shared doc or a template can go a long way in early stages.
7 Free Performance Review Templates (+ Tips) →
Step 14: Plan for Learning and Development
Startups attract people who want to grow. Offering even a small learning and development (L&D) plan shows you’re invested in your team’s future.
Ways to start:
- Set a modest training budget per employee
- Encourage access to online courses, webinars, or industry events
- Offer time for skill-building during slow weeks
Early investment in learning builds loyalty, raises employee engagement, and helps you grow in-house talent. Also, some LMS solutions can offer AI courses that adapt to each employee.
Tip: Ask your team what they want to learn—then support it. You don’t need a formal training program to show you care.
Step 15: Monitor and Evolve Your HR Framework
HR isn’t a one-and-done setup. As your team grows, your people's needs will shift. Make it a habit to review and refine your HR practices regularly.
Start by:
- Asking for employee feedback on hiring, onboarding, policies, and tools
- Reviewing and updating key documents and workflows quarterly or biannually
- Keeping an eye on what’s working—and what’s not
Tip: Set a recurring reminder, even just once a quarter, to review your HR stack—it’s easy to push off, but makes a huge difference.
HR for Startups FAQs
Q: Can a founder manage HR in the early stages?
A: Yes—many founders handle HR early on. With the right tools and a clear checklist, you can cover the basics until you're ready to delegate or hire support.
Q: What HR tools are best for early-stage startups?
A: TalentHR is an excellent choice, specially designed as an HR software for startups. It's an all-in-one all-around platform that offers a diverse set of HR tools starting from an ATS and even including a Safe Voice tool for whistleblowing.
Q: How do startups stay compliant without a full HR team?
A: Use automated tools to simplify administrative tasks, keep records organized, and stay current on labor laws. Fractional HR services or legal advisors can help when needed.
Q: Why do startups need solid HR policies early on? Why track employee development in startups?
A: Solid HR policies set clear rules for job duties and address employee concerns. They help ensure compliance with employment laws as your company expands. Regular performance evaluations favor employee growth and talent management.
Q: How can startups handle HR functions without experts?
A: Use simple software to manage payroll, keep personnel files, and track federal regulations. This covers essential tasks until you build a dedicated human resources team.
Q: What's included in basic workforce planning?
A: Plan for future HR needs by mapping business goals to job openings. Define a pay structure and competitive compensation to attract top talent for long term success.
Q: How do HR tools help new hires?
A: Tools expedite the onboarding process for new hires, organize payroll processing, and track compliance with national laws like occupational safety and Health Act rules.
