HR Policies for Startups

Launching a new business is an exciting, fast-moving venture that comes with great opportunities and potential challenges. However, startups that haven’t established HR policies may risk disorganization, miscommunication, legal issues, and inconsistencies that can affect growth and the bottom line.

Establishing a solid foundation with comprehensive human resources (HR) policies is critical before launching your startup. Clear guidelines provide hybrid and distributed teams with clarity on communication protocols, company policies, legal and regulatory issues, and organizational structure. This sets the tone for the company culture and fosters sustainable growth.

This guide outlines essential HR policies to help you lay the groundwork for long-term success anywhere in the world.

Why HR policies matter for startups

HR policies for startups are particularly vital for creating a company culture rooted in transparency and accountability, especially as teams scale and grow. Consistent policies for hiring, onboarding, management, and professional development can help teams feel supported through inevitable changes.

In fact, ever-evolving technology and shifting work models can cause teams to experience “change fatigue,” a common occurrence noted by HR leaders. However, this issue can be addressed with HR policies that set clear expectations and guidelines, which support teams during times of transition and growth. HR policies that support work-life balance, transparent communication, and that establish feedback loops may help alleviate change fatigue.

A startup company’s HR policies can foster a positive workplace culture, which, in turn, helps attract and retain high-quality talent. A recent Gallup poll showed that a lack of “engagement and culture” was the biggest reason employees left their jobs. Establishing a strong company culture now may help you avoid unnecessary churn later.

For startups spanning states or countries, clear policies on navigating legal and regulatory guidelines are crucial to maintain HR compliance and avoid penalties and delays, which can be costly—especially for a growing company.

With many factors to consider, startups can benefit from implementing key HR policies to support a successful launch.

Key HR policies every startup should have

These eight essential HR policies for startups will help you set the foundation for a thriving business.

1. Attendance and work hours policy

As startups recruit and hire talent, they’ll need clear time and attendance policies that outline the company’s expectations for:

• Work hours. Define start and end times, the days an employee is expected to work, and if there are flexible work hours.
• Absence policies. Address what’s considered an excused vs. unexcused absence, and how to report them.
• Tardiness. Define tardiness and how HR will address it.
• Time tracking. Outline how employees should track time and how often they must submit hours.
• Disciplinary action. Explain what action will be taken after a certain number of tardies or absences.

Global startups with distributed teams must confront the added challenge of managing teams across time zones. Therefore, additional policies, such as clearly defined remote work schedules, are needed to enable team members to collaborate efficiently.

2. Remote and hybrid work policy

As more companies trend toward hybrid and remote work environments, it’s critical to have explicit and transparent work policies. Such policies help manage employee expectations, ensure good communication, and support better productivity for distributed teams. A few policies to consider include:

• Eligibility criteria (who is allowed to work remotely)
• Communication protocols
• Data and security requirements
• Expected work hours
• Equipment guidelines
• Home office stipends or reimbursements for remote work expenses

3. Communication protocols

Clearly defined communication policies set the tone for how team members in a startup will collaborate. These policies also offer visibility into who is responsible for specific tasks. Key guidelines to include in your communication policies:

• Communication channels. Outline which channels and tools team members should use to communicate in specific circumstances. If it’s a quick question, should they use Slack or email? Are meetings held via Zoom or Teams? How do team members communicate urgent matters?
• Response times. Define expectations for how quickly team members should respond to inquiries. Is a response expected during off-hours?
• Asynchronous, remote, and hybrid team communication. Clear communication policies will help prevent delays and inefficiencies for asynchronous and hybrid teams. Set guidelines for how asynchronous teams should share updates and how remote team members should collaborate.

4. Code of conduct and anti-harassment policy

Startups should have a code of conduct that sets standards to maintain a respectful, professional work environment. This may include guidelines for behavior and performance, as well as standards for workplace safety and legal compliance. Other code of conduct policies might address:

• Dress code
• Attendance
• Safety guidelines
• Discrimination and harassment
• Reporting protocol
• Zero tolerance

Code of conduct policies should apply to all work environments, including remote and hybrid workspaces.

5. Time off and leave policy

Time off and leave policies outline how to request time off and the amount of time off allotted for vacation, sick leave, family leave, jury duty, bereavement, and other major life events. HR policies for startups should also include whether paid time off is accrued or unlimited, or a combination of both.

Clear guidelines on how to submit requests and how requests are tracked will help limit miscommunication about time off or confusion about pay, especially for distributed teams that work at various times and days.

6. Performance management policy

Performance management involves evaluating and reviewing employee performance to encourage professional development that aligns with your organizational goals. Offering employees feedback about their strengths and opportunities for growth, and giving them space to give feedback in return, helps create a culture of transparency and accountability. HR policies for a startup company should outline:

• How feedback is given
• When evaluations occur, and who oversees them
• When performance improvement plans are used and subsequent employee expectations
• Tools and metrics used to measure performance
• Probation periods
• When promotions are given, and how compensation is determined

7. Recruitment, onboarding, and termination policies

Regardless of the size of your startup, you should establish recruitment and onboarding policies that support HR with hiring top talent. Recruitment policies should outline who generates job descriptions, where jobs are posted, candidate management, how background checks are conducted, and what tools are used to support the recruitment process.

Policies should clarify the onboarding process to ensure new-hire success, including timelines for training and paperwork like payroll and tax information. It may be helpful to provide a checklist to new hires and their managers to follow throughout the onboarding process. That will help define expectations and include key dates like when benefits start. Regularly check in with new employees to set the foundation for open communication.

Termination policies outline the process for ending employment, including necessary documentation and legal guidelines to ensure compliance. These policies will help guide your HR team as they address issues in a compliant manner. This is particularly important for startups with a global workforce.

8. Data security and privacy policies

Data security and privacy guidelines are a vital part of HR policies for startups. They outline how to protect employee and company data while maintaining regulatory compliance in the countries they operate.

Companies managing remote teams are particularly vulnerable as they offer numerous endpoints for malicious actors to access. Cell phones, laptops, printers, and other devices are targets, as well as servers where data is stored. To protect these assets, HR policies should address how employee and company data is protected, such as:

• Encryption
• Two-factor authentication
• Cybersecurity training for employees
• Password management
• Remote access tools
• Data storage best practices
• Secure communication channels
• Confidentiality

Legal and compliance considerations

HR policy for startups that operate in other countries must include guidelines for adhering to local, regional, and national data and security regulations to avoid penalties and fines. These regulations and standards, such as the General Data Protection Regulation (GDPR) and Payment Card Industry Data Security Standard (PCI DSS), establish clear guidelines for securely handling data and implementing security to protect your business and consumers.

In addition to data and security regulations, you must follow employment laws in every location where you employ remote workers and where your business is incorporated. As you create HR policies, ensure they comply with all local regulations regarding payroll, labor policies, discrimination, and workplace safety. As laws change, policies and handbooks must be updated to ensure compliance and avoid legal action or financial penalties.

Tips for startup policy implementation

After you establish clear HR policies, it’s time to implement them. Here are a few tips for streamlined implementation:

• Provide a digital handbook to employees during onboarding. Keep language clear and human-centered while emphasizing your core values as an organization.
• Regularly review your HR policies with a legal team and an HR policy analyst to ensure compliance and adherence to local laws and identify any information gaps.
• Encourage team members to offer feedback and establish a streamlined process for submitting it.
• Align HR needs with your startup’s goals to help achieve long-term objectives and sustainability. Establish a process for HR and leadership to regularly communicate about hiring needs, business strategy, training, and growth.

How Velocity Global supports HR policy compliance

HR policies for startups are essential for creating a transparent, engaging, and compliant workplace, especially for distributed and hybrid teams. However, many startups do not have the capacity to develop, implement, and manage global HR policies for their distributed teams. That’s why they often partner with an Employer of Record (EOR). Velocity Global’s EOR solution keeps your business compliant, streamlines recruitment and hiring, and supports effortless workforce management in over 185 countries.

As you grow, Velocity Global will help you navigate the complexities of local labor laws, managing contracts, global benefits, and talent relocation, without disrupting daily business operations. We’ll act as the employer on your behalf, so you can focus on international expansion and building your global brand. Get started by reaching out to us today.

This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.

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