HR checklist for startups: Everything you need to cover

Why HR Matters in a Startup

In the rush to build products and raise funding, HR can feel like a low priority. But neglecting it puts your startup at risk legally, financially, and culturally.

Solid HR processes help you:

· Stay compliant with employment laws from day one

· Attract and retain talent in a competitive market

· Create a structure as your team grows

· Avoid costly mistakes, from misclassifying workers to missing payroll deadlines

Good HR isn’t about red tape, it’s about protecting your business and empowering your team to perform. Laying the groundwork early lets you scale faster and smarter.

Pre-Hiring Essentials

Before you even post a job ad, get your internal foundations in place. Hiring without a clear setup leads to confusion, delays, and legal risk.

Here’s what to sort out first:

Define roles and responsibilities: Be clear about what you need. Write role descriptions that reflect real business goals.

Decide on employment type: Will they be full-time, part-time, or a contractor? Misclassification can lead to fines.

Register your business as an employer: In the UK, that means registering with HMRC before your first payday.

Set up PAYE: You'll need a PAYE (Pay As You Earn) scheme to handle tax, National Insurance, and pensions.

Choose a payroll system: Even for small teams, using software keeps you compliant and saves admin time.

Understand your legal obligations: That includes right-to-work checks, contracts, and minimum wage compliance.

Laying this groundwork makes recruitment smoother and helps you stay compliant from the start.

Recruitment and Hiring

Now that your internal setup is ready, it’s time to find the right people through. A structured hiring process helps you move fast without compromising on quality. You can even get an outsourced HR team to help you with the recruitment and selection process

Key steps to follow:

· Write clear, honest job ads: Focus on what matters, skills, expectations, and your startup’s mission. Avoid buzzwords.

· Post where it counts: Use job boards, LinkedIn, and relevant startup communities. Don’t overlook referrals.

· Screen efficiently: Use simple scorecards to assess CVs and interviews consistently.

· Run fair interviews: Ask structured questions tied to job outcomes. Keep the process tight, top candidates won’t wait.

· Do background checks: Right-to-work checks are legally required. For some roles, DBS checks may be necessary.

· Send offer letters promptly: Include clear terms, salary, start date, and conditions (like references).

Hiring sets the tone for your company, and you can even get an outsourced HR team to help you with the recruitment and selection to make this a smooth, transparent process that builds trust and shows candidates you’re serious, even if you're a small team.

Onboarding New Employees

A strong onboarding process improves retention and productivity, especially in startups where every new hire counts.

Here’s what effective onboarding looks like:

· Send a welcome pack: Include their contract, company handbook, and any setup instructions.

· Prepare their workspace: Whether remote or in-office, ensure laptops, logins, and tools are ready.

· Assign a point of contact: Someone to answer questions and help them settle in.

· Walk through key policies: Cover working hours, holidays, expenses, and communication norms.

· Set clear goals: Define what success looks like in their first 30, 60, and 90 days.

· Schedule check-ins: Regular one-to-ones help flag issues early and keep new hires engaged.

Good onboarding reduces churn and gets people contributing faster. It doesn’t need to be elaborate, just thoughtful and consistent.

Payroll and Benefits Setup

Once someone joins your team, you’re legally and financially responsible for paying them correctly and on time. Errors here damage trust fast.

Make sure you’ve covered:

· Payroll system: Use HMRC-recognised software to run PAYE, generate payslips, and submit reports.

· Auto-enrolment pensions: If eligible, employees must be enrolled in a workplace pension scheme, and you must contribute.

· Holiday pay and sick leave: Statutory entitlements apply from day one. Track leave accurately.

· Expenses process: Define what’s reimbursable and how claims should be submitted.

· Payslips and deductions: Provide detailed payslips showing tax, NI, student loan, and pension deductions.

· Employee benefits: You don’t need flashy perks early on, but consider essentials like statutory parental leave or health support.

Even with a small team, professional payroll and clear processes show you're serious about taking care of your people.

Legal and Compliance Requirements

Ignoring HR compliance can land startups in hot water, even unintentionally. Avoid risk by knowing your legal obligations from day one.

Here’s what to cover:

· Written employment contracts: Must be provided before or on the first working day. These should outline duties, hours, pay, and notice periods.

· Right-to-work checks: You must verify and document every employee’s legal right to work in the UK before they start working for you.

· Data protection: Store employee data securely and comply with GDPR. Limit access to sensitive information.

· Health and safety: Even in an office or remote setup, you have a duty of care. Provide a basic policy and risk assessment.

· Statutory policies: Certain policies (e.g. disciplinary, grievance, and health & safety) are legally required.

· Record keeping: Keep accurate records of pay, leave, sickness, and working hours.

· Home working – if your employees are home working, you need to conduct a ‘home working risk assessment’

Get this wrong, and it’s not just fines, it can affect funding rounds and your reputation. Prioritise compliance early to avoid headaches later.

Company policies and documentation

Policies might sound corporate, but in a startup, they create clarity. Clear documentation helps everyone know the rules and expectations and protects your business.

Start with these essentials:

· Employee handbook: A single source of truth for how your company operates — from holidays to communication norms.

· Code of conduct: Outline expected behaviour, including inclusivity, respect, and professionalism.

· Sickness and absence policy: Clarify how to report sick days and what’s required for long-term absence.

· Disciplinary and grievance policy: Legally required and important for managing issues fairly.

· Remote work policy: If you offer flexible work, set expectations around hours, availability, and security.

· IT and data use policy: Protect your systems and outline acceptable use of devices and software.

Don’t overload your team with paperwork, but make sure the basics are written, accessible, and regularly reviewed.

Building company culture early

Culture isn’t ping-pong tables or Friday drinks. It’s how your team works, communicates, and makes decisions, and it starts with you.

Here’s how to shape it with intent:

· Lead by example: Founders set the tone. How you act becomes the default culture.

· Define your values: Keep it simple. Three to five genuine values that reflect how you work and hire.

· Communicate openly: Create regular rhythms for feedback, team updates, and honest conversations.

· Celebrate wins and effort: Recognition doesn’t need to cost much. A Slack shoutout goes a long way.

· Prioritise wellbeing: Encourage balance, model it, and support people when they’re struggling.

· Hire for culture-add, not culture-fit: Look for people who’ll bring something new, not just blend in.

Culture is what holds things together when things get messy. And in startups, that’s most of the time so build it deliberately.

Tools and resources for startup HR

You don’t need an HR department to run HR well, but you do need the right tools. The right setup saves time, reduces errors, and keeps you compliant.

Consider these categories:

· HR software: Platforms like Breathe HR handle time off, training, and management.

· Applicant tracking systems (ATS): Tools provided by partners such as hireful help streamline hiring without drowning in CVs.

· E-signature platforms: DocuSign or HelloSign speed up contract signing and reduce paperwork.

· Communication tools: Slack, Zoom, Notion, set up and standardise how your team connects and collaborates.

Pick tools that scale with you. Avoid overcomplicating things, but don’t try to manage HR on spreadsheets alone.

Final HR Checklist Summary

Here’s a quick recap of what your startup needs to cover:

Register as an employer and set up PAYE Define roles clearly and decide on employment types

Use structured, fair hiring processes. Provide compliant contracts and run right-to-work checks. Build a simple but effective onboarding process. Set up payroll, pensions, and statutory benefits. Write and share core company policies. Ensure legal compliance with employment law and GDPR Invest in tools to manage HR efficiently. Shape a strong, intentional company culture

HR doesn’t need to be complicated, but it does need to be done properly. Put these foundations in place now, and you’ll free up time, avoid legal trouble, and build a workplace people want to join.