Kruze Consulting has worked with over 1000+ startups and has helped set up numerous HR infrastructure systems. HR is an essential component of any startup’s foundation. If a startup doesn’t have the HR systems in place to handle rapid headcount growth, managing the increase in headcount can actually distract startup CEOs from growing the business. In other words, set up your startup’s people process to scale!
It doesn’t matter how awesome your product is; poor hiring, an unproductive culture, and stagnant employees can sink the company in a hot minute. Long employee ramp times, executives wasting time repeating tasks that can easily be automated, unhappy new hires - use technology to help your company overcome these basic HR problems.
Below we’ve provided a suggested list of software, processes, and procedures to help startups navigate the HR landscape. Our recommendation: if you can afford to put the later stage processes in place sooner rather than later, you should do it!
The Essentials: HR Systems for 0 - 7 Employee Startups
- Payroll & Benefits, Gusto or Rippling: we recommend these to all of our clients.
- HR Management Platform, Zenefits: Our #1 recommendation for managing employee offer letters and PTO. It’s seamless.
- Communication, Slack: everyone is using it for a reason.
- Employee Recognition, Bonusly: with the Slack integration, this is a great, great way for employees to recognize each other.
- Harassment Training, ThinkHR: yes, you need this right from the start.
- Background Checks, Chekr: don’t get surprised. Do you due diligence and check for red flags with Chekr.
- Feedback, Google Forms Anonymous Suggestion Box: sometimes employees don’t feel comfortable asking certain questions or notifying management about situations.
- Basic Advisory, Kruze Consulting: everyone has questions about which health care plans to pick, what other startups are doing, and best practices around hiring and firing. Kruze has all the templates, and works exclusively with funded startups.
The Growth Phase: HR Systems for 8 - 40 Employe Startups
- New Employee Orientation, Lessonly: this is the first place we send our new hires. Lessonly is critical for new hire orientations, as we use it to explain all of our internal procedures. It also allows for lesson plans and custom video uploads. Even better: Lessonly has quizzes at the end of each module, so you can actually confirm employees are learning.
- Continuing Education, LinkedIn Learning (aka Lynda): Seth Godin rocked my world in a seminar about how we have learning all wrong: homework should be done at school, lectures should be done at home and performed by THE world expert. Why or why would you have your best excel jockey in the company teach everyone else when you can have the best Excel Guru in the world teach your team on LinkedIn Learning?
- 401k Plans, Guideline/Gusto, Rippling and Human Interest: while most Seed Stage startups don’t offer 401Ks, many Series A startups start to think about this benefit. By the Series B, you should definitely have a 401k in place.
- Employee Handbooks, Gusto: Gusto’s amazing DIY handbook tool is great backbone, but you’ll need an advisor to refine company specific policies and procedures that aligns with your company’s core value system.
- Robust Health Benefits, Zenefits: make no mistake, if you want to hire top talent you now need to offer top benefits. Now is the time to up your Silver and Gold packages to Platinum. It’s also time to consider an FSA or HSA. Some cities, like San Francisco, require that you spend a certain minimum on each employee’s benefits and report on that compliance (known as the SF Health Care Security Ordinance).
- Tuition Assistance Programs, Tuition.io: companies like Tuition.io are revolutionizing the way employers can help free their teammates from the shackles of student loan debt, driving loyalty and retention in the process.
- Commuter Benefits, Gusto and Rippling: if you have a 20+ employees and are based in SF, you are required to provide up to $260/mo in pre-tax commuter benefits. Other jurisdictions have similar requirements. But even if you’re not in SF, it’s a best practice to provide this benefit for your team. Kruze can help you set up commuter benefits and maintain compliance.
- Intermediate Advisory, Kruze Consulting: How much should I be paying my new VP of Engineering? How much stock should I grant, and what type of ESOP should I offer? Kruze has the answers.
- Project Based Grading Systems, Kruze Consulting: one of the biggest complaints that we’ve heard from employees is that they’re not getting enough regular feedback so that they can improve their performance and get ahead in their career. Kruze has template frameworks to help you create project based grading systems. Think “Hey Jane, this project that you completed was a B+ because you forgot to do XYZ. You’re so close, and I’m sure we can get you up to A+ work on the next project.” The results we’ve seen after implementing these controls were immediate: on the subsequent projects, employees knew exactly how to improve and they did. A big win for management and employees alike.
- Performance Reviews, Lattice: quarterly or biannual performance reviews are important to your employees growth and the well being of the company. Biweekly 1:1 meetings should also be implemented and documented. Lattice organizes the review process in an easy to use online interface and Kruze can help you build the appropriate questions that management team should be asking of itself and its employees.
- Recruiting Management, Greenhouse and Google Hire: these amazing pieces of software helps you manage the recruiting process and collaborate with your team. Some of the most frustrating parts of the recruiting process is organizing resumes, coordinating schedules, and quantifying the interview process all in a timely manner. Greenhouse and Google Hire handles all of this.
- Event Planning, Blue Barley: allowing your team to bond outside of work is important. But finding and booking creative events can be difficult. This is where Blue Barley comes in.
- Recruiters: your time is best spent doing what you do best. Yes, recruiters are expensive but they cut the search process dramatically. Kruze has an extensive network of recruiting professionals that we can introduce you to depending on the role that you are looking to fill, including companies like Triplebyte and Avra.
- Gifts, Bouqs and Minibar: if your teammate has done something awesome, really reward them with flowers from Bouqs or booze from Minibar.
- Say Something Positive: words can go a long way. Make sure that your managers are routinely saying positive things to their teammates. There are plenty of apps out there that can help randomly remind them.
- Swag: you haven’t really made it until you have your startup’s logo emblazoned on a Patagonia. Sports Basement has the best pricing and service. For other bougie swag, see Clove & Twine. Business cards are going the way of the dinosaur, but if you must, use Moo.
The Enterprise: HR Systems for 40+ Employe Startups
- PEO (aka Professional Employer Organization): PEOs are companies like Justworks, Trinet, and Sequoia. They are “all-in-one” payroll and benefits providers that are able to provide more favorable benefits plans because they have a much larger group policy. Don’t be fooled though, their Service Cost is 10x+ the price of Gusto, and most the time any cost savings you got on the health plans is more than washed out on their monthly Service Costs. At least until you have scale. Kruze recommends that you consider a PEO once you’ve reached 40+ employees OR if you have employees in 5+ states. Before then, cost outweighs benefit. Our top picks are Sequoia and Justworks.
- In-house HR professional: Kruze recommends considering hiring a full time HR professional once you’ve reached 40+ employees. But if you’re planning on growing quickly, you might want to consider hiring your full time HR professional sooner than that
- Continuing Education Programs: your best and brightest employees will be eager to advance their careers and knowledge base, and one of the best ways to do that is through continuing education. Kruze has a library of Continuing Education options and plans based on industry specific talents. One of our top picks in Continuing Education is Harrison Metal General Management.
- Mentorship Programs: careers may start with technical proficiency, but they blossom once soft skills are applied. Your employees likely have many other goals beyond just developing trade knowledge, like networking, sales, and better communication skills. Sometimes folks don’t even know what they’re missing, but mentors can help guide them. The BestSelf.co journal is a fantastic resource that helps both mentors and employees stay accountable on their personal KPIs.