Small business owners are used to wearing many hats, but that practice eventually becomes unmanageable. At some point, you’ll need to create an HR department that focuses on payroll, recruitment, and workplace culture. But what HR options are even available for startups?

The Best Human Resource Options for Growing Startups

89% of HR professionals agree that conducting ongoing performance management is more effective than yearly reviews. The following options can ensure your business stays on track.

1. Hiring a Single Employee HR Department

While this option is the most expensive (and may not be available to everyone), you can hire a single-person HR department if your employee won’t be overwhelmed. With that said, you should create a well-defined HR process before hiring an employee to streamline onboarding.

Keep in mind that it’s cheaper to hire a skilled HR employee that has experience in performance management, benefits administration, recruitment, onboarding, and compliance. This way, they’ll know what key performance indicators to track and how to manage tasks independently. 

hr outsourcing company
Photo by Christina @ on Unsplash

2. Hiring a Virtual Assistant to Assist With HR

A virtual assistant (VA) is a person that works remotely and performs various administrative tasks, such as data entry and answering emails. However, you can hire a specialty VA, such as accountants or recruiters. Some VAs may even be experienced human resources professionals.

Knowing how to hire a virtual assistant is the first step to finding the perfect employee. While the VA hiring process is similar to most recruitment strategies, you must make sure you’re targeting the right professional. Search for “HR virtual assistant” instead of a general virtual assistant.

3. Outsourcing Your Whole HR Department

Human resource outsourcing is when a company hires a third-party organization to handle HR tasks. An HR outsourcing company will typically handle hiring and recruitment, payroll and compensation management, and specialized consultancy services, such as data analysis. 

HR outsourcing is similar to a professional employer organization (PEO) in that they’re used to contract human resource services to another company. However, a PEO is a co-employment agreement, whereas an HR outsourcing company stays as a separate employer or entity.

PEOs are more suited for small to medium-sized businesses, whereas HR outsourcing companies appeal to enterprises. Either way, both options are more cost-effective than hiring full-time staff because you don’t have to train or pay for the outsourced employee’s benefits.

4. Using HR Software and Automation

HR software, such as Zoho People, Built for Teams, and Zenefits, allows teams to onboard talent, measure employee performance, and create learning opportunities for managers. Most HR software can automate most of the recruitment process, which frees up a lot of your time.

But the best HR software will integrate with other essential tools, such as your office suite, meeting apps, and financial tools. You’ll want to make your HR software a single source of truth, so you can perform multiple tasks from the dashboard, like signing up for health benefits.

5. Managing the Department By Yourself

The process of delegating tasks, especially ones as important as hiring and payroll, can be challenging for most business owners. Thanks to HR software, you can theoretically handle HR duties yourself, but it isn’t recommended if you have no experience in the field or lack free time.

Remember: your time is precious. If you’re spending too much time on your administrative duties, you won’t be able to grow your business or search for clients. As a rule, if you have over 10 employees or your time could be better spent elsewhere, delegate HR to someone else.