How Your Small Business HR Strategy Can Help You Scale

small business hr strategy

By Grace Lau, Director of Growth Content, Dialpad

Startups and small businesses are all about speed and agility. As we’ll see, a little bit of investment into a small business HR strategy now will make scaling your business so much easier in the long term.

You don’t necessarily need to hire a full-time employee. There are plenty of HR tech platforms on the market now which can streamline a lot of this work for you.

But HR is so foundational to a growing company. There’s more to it than picking a new email marketing solution or the best VoIP app, so let’s look at the role HR plays in a growing startup and what the tech could do for you.

Why small businesses need HR

You’ll know that HR takes care of hiring in companies, but there’s much more to it than just letting the Applicant Tracking System run its course. Did you know that 23% of businesses fail because they don’t have the right people?

HR teams and tech can help you hire the right people, even if you’re screening hundreds of applicants. Perhaps more important is retaining the great people you’ve found after you’ve already hired them.

IBM found that employees are 12 times more likely to quit if they don’t get the training and development they need. LinkedIn’s 2018 Workplace Learning Report found 94% of respondents expressing that they would have stayed with their employer longer if they’d invested more in career development.

A good HR strategy includes thorough onboarding, but also regular check-ins with employees to make sure they’re growing their skills and see a future at your company. Whether you’re hiring an HR director, adopting HR tech, or both, maybe the most important thing HR does for your startup is legal protection.

HR provides legal protection

Large companies with a whole legal team on the payroll can weather a lawsuit. But for a small business like yours, it could be a months-long distraction at a time that demands total focus. HR directors will know all about the relevant compliance issues in your field, but many HR tech solutions offer region-specific compliance training that’s always up-to-date and can easily scale.

Your startup is going to grow a culture whether you want it to or not, so you should make sure it’s a good one from the start.

Culture is key to your small business’ success, and culture largely runs on policy. HR helps you draft and communicate policies such as dress code, benefits, time and attendance, internet use, disciplinary procedures, and holiday leave.

The first impression you make to new employees is vital to long-term employee retention. You need to make sure your company’s culture and values are well-defined, well-enforced, and communicated clearly throughout the employee recruitment process, training, and new hire onboarding.

HR will help you welcome new hires into a positive and productive working culture. And if they see everyone in the company living those values, they’ll be more likely to pass them on to other new hires when they arrive.

Benefits of HR for small businesses

Sorting out your HR now can take a lot of day-to-day management out of your hair so you can concentrate on growing the company.

HR acts as a go-between, taking everyday concerns and problems from the employees that would have had to go to executives. These busy senior directors shouldn’t be dealing with minor issues around payroll and booking annual leave.

In a remote environment, HR software can radically streamline everyday processes for executives by giving them much greater transparency in managing a remote workforce. Just one employee booking annual leave could turn into a chain of emails and calendar-checking that takes up time neither you nor your employee can afford to lose. HR software makes these processes as easy as the best-in-class calendar software you’re likely using.

Making sure your company culture is a healthy one is important for hiring and long-term employee retention. These are both vital to your company’s long-term success. Any problems not addressed now will be magnified as the company scales.

Photo by Priscilla Du Preez on Unsplash

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HR can help increase diversity

Diversity is one aspect of this. Many startups begin life hiring from within their employees’ existing networks. This is okay to begin with, but eventually, you’d end up with a huge workforce of people who look and think like the founding group. In business as in nature, monocultures are fragile while diverse environments are healthy and robust.

A good HR director will make sure that your recruitment efforts are looking at a diverse range of candidates. If you’re not ready to hire a director, lots of HR software has considerations for this built-in. Diverse hiring and a healthy workplace culture maintained with clear policies are crucial to your company’s success as you scale, but even more so as we start to see more of Gen Z in the workforce.

The brightest young people in the talent pool have new expectations about workplace culture and diversity. Building HR into your hiring practices can help you be proactive about meeting those expectations by living your organization’s stated values.

Another important benefit of HR for small businesses is documentation. Good documentation protects your business by keeping records of important processes. If you’re working near food, for example, you’ll need to keep documentation ready for a health inspection at any time.

If you need to let an employee go, you should keep documentation of all meetings leading up to that. In a worst-case scenario, this will protect you if they raise an unfair dismissal lawsuit.

In any case, this kind of documentation proves you’re obeying set procedures. That might be federal, state, or industry-specific compliance laws. It might mean you’re just following the procedures you’ve set for yourself.

As the company scales, it’s useful to rely less on the judgment of any one manager and more on clear guidelines. This helps everyone make quicker decisions which are important to fast-growing businesses.

How HR can help you scale

As your company scales you’ll need to spin up new departments, which have some of the problems of starting up a new company at a smaller scale. You might not know how to start a virtual call center from scratch, but to an HR director job profiles, org charts, and staffing plans are all second nature.

HR tech on the other hand allows you to standardize and repeat some of these processes. Office phone systems for small businesses can take some time for new hires to learn inside-out. HR tech solutions let you write role-specific onboarding guides once so you don’t have to explain it again.

A good talent development strategy is especially important for startups and small businesses. Quality HR solves that. An early-stage startup is full of generalists who have to wear many hats and often enjoy doing so.

If successful, these early-stage employees will often find themselves quickly promoted to manager roles where they’re overseeing teams of people doing what was once their whole job. Your most talented designer might be best-placed to be a design manager, sure, but do they have the training and experience to be the best manager they could be?

HR can help you scale your business by turning perfectly-chosen employees into fully-trained managers. They’ll be able to confidently run their own teams and guide their direct reports’ training and development.

Small business HR strategy in the long term

As you can see, HR is vital for startups who want to stay in the game for a long time.

A small business HR strategy can set you up for success by getting lots of little management problems out of the executives’ hair. This is essential so founding members can focus on growing companies into sustainable operations.

In the long term, it’s about more than simply just compliance, sick leave, or dress code policies.

Whether you’re starting with an HR director or a software solution, getting your HR strategy right at the early stage will help you cultivate and reinforce your vision for what a good company looks like day-to-day.

From the early hires to the exit, an HR strategy helps you build a great working culture that employees will want to be a part of. One that values its in-house talent, takes care of its people, and focuses on developing their skills further than they thought possible.

In turn, you’ll get better candidates to choose from at the hiring stage, and your early investment in human resources and a holistic strategy will pay off in a virtuous cycle that helps turn your small business into one of longevity.


Grace Lau, Dialpad

Grace Lau is the Director of Growth Content at Dialpad, an AI-powered cloud communication platform and cloud PBX for small business for better and easier team collaboration. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content. Connect with her on LinkedIn.


Simplify HR management today.

Simplify HR management today.

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