The short answer is yes; startups do need HR. Founders in startups often wear multiple hats at once. They take on several jobs and tasks, including Human Resources, despite having no proper HR training. Long hours and stress are common as they race to get their business up and running and into the green while hiring and onboarding, employee happiness, and company culture wind up at the bottom of the priority list.
The problem is that this leads to great disharmony within the team, which is a significant contributor to the failure of startups. 23% of businesses fail because they don’t have the right team. This is why a dedicated operations or HR person is a must from early on. Dedicating resources to developing HR practices sets your startup for long-term success in attracting and retaining top talent. That will ultimately lead to business growth.
In addition, startup accelerators prefer teams with a history of working effectively together because this indicates stability. Investors will always look at employee retention rates to gauge the leadership team’s effectiveness.
A startup may be able to hack its way to business growth, but it cannot hack its way when it comes to managing people.