HR Services for Startups Can Help Owners Focus on the Brass Ring

May 16, 2024
HR Services for Startups

HR outsourcing services enable businesses to worry less with some or most of their HR functions because these functions are supported by another company. This can save valuable time and energy, making essential functions more efficient, especially for small to medium-sized businesses.

Time is an important growth factor, and maximizing it is essential. With outsourcing services, based on the National Association of Professional Employer Organizations (NAPEO), 28% of small businesses grew in 2020—this figure climbed to 69% for PEO clients*.

However, HR services for startups can look a bit different. In this article, we'll focus on the services that startups may need to help thrive, making HR more efficient and primed for growth.

Understanding the Spectrum of HR Services for Startups

Startups are a bit different than regular small businesses and therefore may have different HR needs.

There are three main characteristics of a startup:

  • Creates new products, markets, and business models.
  • Takes on high levels of risk to achieve rapid growth.
  • Sources outside funding from private investors.

A startup aims to disrupt the market significantly, providing a new, often revolutionary product or idea that may fundamentally change the world. Startups have the potential for rapid growth and are often technology-based. Google, Apple, Amazon and Microsoft are well-known examples.

Startups often receive funding via venture capital (VC) or a type of private equity financing designed for rapid growth.

In a rapidly changing and growing industry, HR outsourcing services can help save startup owners money, time and stress.

What PEOs can provide

A Professional Employer Organization (PEO) is a type of HR outsourcing service provider that can provide significant benefits for businesses. Companies that worked with a PEO have reported 40% higher growth in revenue* compared to those that did not.

Leveraging risky venture capital funding, startups can rely on a PEO. On average, a PEO can deliver a return on investment of more than 27%*, according to NAPEO.

What services does HR outsourcing provide for startups?

Access to Employee benefits

PEOs can help a startup get access to competitive, top-tier employee benefits that can aid in talent acquisition and retention.

Benefit for a startup: In a tough job market, you can offer attractive packages that not only draw in exceptional talent but also improve employee retention. Companies that leverage a PEO experience a 19.6% reduction in turnover* compared to those that do not.

Recruiting and onboarding

PEOs can provide effective recruiting and onboarding tools to help get a startup off to a running start with optimized processes.

A streamlined and organized process is crucial in both recruiting and onboarding, allowing key personnel to avoid paperwork and recordkeeping. Good onboarding helps set new hires up for success, promoting smooth acclimation to company culture.

Benefit for a startup: In a startup company, there is no leeway for a bad hire. You need people to help you break the mold in a high-risk, high-reward environment. Speed of development is important.

Employee engagement and career development

A PEO can also provide engagement tools such as user-friendly interfaces that help employees in their benefits election process, even through on-the-go mobile apps.

The tools can include services to support career development, like performance management, job training, and leadership training. Both engagement tools and development opportunities are key to promoting job satisfaction among employees.

Benefit for a startup: Keeping employees engaged and developing means keeping great employees who will make your company the best it can be.

Efficient HR administration

PEOs can make human resource administration more efficient through a variety of automated processes, from payroll processing to time tracking and time-off tools and more. Automating these processes help relieves some of the workload of your HR team, improving overall efficiency.

Benefit to a startup: More cost-effective use of personnel. People can focus on growth and innovation, not payroll paperwork.

Compensation benchmarking and reporting

A PEO may provide access to compensation benchmarking reports that compile information from over 15,000 job titles across 225 industries, so you can feel confident you are offering compensation rates that are competitive.

These reports provide:

  • Accurate and reliable data to make more informed compensation decisions
  • Convenient access directly from Workforce Analytics
  • Custom analytics for smarter job matches and more accurate salary pricing

Benefit to a startup: Make smart compensation decisions to be competitive in attracting and retaining world-class talent, with spending less time computing the data yourself.

Scaling to expand HR capabilities

Outsourcing human resources allows for quick scaling which is crucial to a startup.

Benefit to a startup: rapid growth is a key factor; your HR operations will grow as you do.

Cultivate a strong team culture

A strong, clear, and cohesive company culture is crucial for startup success. A PEO can help to provide expertise in employee relations so you can create an environment where employees thrive, with expert support and guidance in organizational behavior.

Benefit for a startup: You are free to develop a workplace culture that resonates with your vision and values, driving low turnover rates and higher engagement.

HR compliance and risk mitigation

Navigating the complexities of HR compliance is daunting, especially for startups. A PEO provides expertise in employment-related rules and requirements, so your company can stay up-to-date and comply.

Benefit for a startup: CEOs can focus on growth with peace of mind, knowing their business is getting best practices so they can comply with  local, state and federal employment-related requirements.

Expert, personal attention

Another benefit of a PEO is having a team of HR professionals on hand to provide support and expertise every step of the way.

A PEO generally provides support with a professional HR team that includes dedicated support professional who knows you and your business. With dedicated team of support at your fingertips, you'll never want to run HR any other way.

Benefit for a startup: You are juggling a lot. Expert guidance, especially from an HR professional who knows your business sector, can help you spot rewards and help mitigate risks.

HR Services that Help Startups Accelerate

Outsourcing your HR with a PEO can empower your startup to focus on innovation and growth.

By reducing the time spent on day-to-day operations, an organization like TriNet helps you so you can free up your resources and allowing you to concentrate on scaling. Our HR technology and access to experts help streamline your processes, setting the stage for rapid growth and high-reward outcomes.

Starting a business isn’t easy, especially a high-risk startup, but TriNet helps you by taking certain HR tasks off your plate. We help with the payroll processing, provide you access to benefits, help with risk mitigation and with a dedicated team of support so you can focus on building the best team, leading more effectively and accelerating development.

*Individual business results may vary.

This communication is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance.

This article may contain hyperlinks to websites operated by parties other than TriNet. Such hyperlinks are provided for reference only. TriNet does not control such web sites and is not responsible for their content. Inclusion of such hyperlinks on TriNet.com does not necessarily imply any endorsement of the material on such websites or association with their operators.

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