Why Human Resources fail in Startups

Yes, HR fails many times in the startup industry, that’s no surprise. But why does it fail in startups and succeed in companies or corporates?

Before all that let’s take a journey back in time to the 18th century, when HR emerged during the industrial revolution it simply focused that people are the success of any organization.

By the early 20th century Dave Ulrich listed the HR function as:

-aligning HR and business strategy.

-re-engineering organization processes.

-listening and responding to employees.

-managing transformation and change.

By 2021 that’s not all that HR does, it has become more complex and interlocked into the organization on many levels from daily operations to long-term strategic goals.

That’s all great and for a moment it sounds like it’s more of a reason for HR to succeed in the startups.

Well in general speaking it’s true, but in reality, it’s not; for the initial launch of HR, you need strategic goals, long-term plans, growth plans…etc. But a startup lacks many of that since it’s similar to a newborn child kicking and screaming and unable to control, express, or even have motivation for the future. 

Yes, startups have a business plan, financial projections, product development, and all the good things startups have. But that’s all just plans on paper in the real-world startup founders are seeking two main things:

-Launching their product/service.

-Raising capital.

The two are hard and alongside that you have to manage the people – providing low salaries, no clear job descriptions no clear career path; heck even the startup founders do not know where they are going to be in the next 3 months.

So, imagine you are telling a newborn child that is not more than 6 days old I’m here to plan your path to university… That would not make any sense to him, he is merely looking for his basic needs to be fulfilled. The same goes for the startup, it is focused on very short-term goals and objectives, thus turning the HR function with all its strategic goals objectives into a daily operational department applying basic administration for all its employees.

After reading this it may strike you as a surprise since everyone runs around yelling, WE NEED HR, WE FAIL WITHOUT HR…etc

So how can we avoid HR failing in startups?!

There is no straight answer for that since each startup has its different nature, phase, and goals. But I can provide you with some guidelines that would boost the HR in your startup.

1-Legal Protection: making sure that you comply with whatever regulations in your country towards employees and their work.

2-Talent Acquisition: not with all the fancy plans but it needs to search for people with the mindset of startups not regular employees with a punch in/punch out mindset.

3-Record Keeping: protecting sensitive information related to employees, have their documents organized..etc.

4-Policy Creation: far from all the unnecessary bureaucratic work and regulations that most policies have, instead focus on what’s important and what your employees need.

5-Employee Training: a startup is a very fast-changing and growing place, train your employees to cope with all that. Remember the skills they have today are not necessarily suitable for tomorrow.

6-Perks: focus on benefits, non-tangible ones as you do not have money to spend all over the place, after all, you are a startup. And managing finance is hard.

Finally, remember to take it easy and think about what the startup needs the HR to achieve instead of piling all that we know in the HR domain.


Over 15 years of professional experience in various fields and industries, Worked in many sectors ranging from Airlines, NGOs, Retail, Multinational and National companies. Attended many conferences in Egypt and abroad as a keynote speaker and trainer such as World of a Woman Conference, Las Vegas 6th Information Security Conference, Delta Academy for Science's academic conference. Also two times tedX Speaker. Moustafa loves working in startups on many levels starting from the strategic planning until daily operations, because that’s where the buzz is. Author of two published books "Biometrics, What and How?" and “Training, What and How”. Utilizing his 15+ years of experience he founded “Startup Fusion” that provides services to Startups in Egypt across 3 core functions that any startup needs to succeed (Human Resources, Finance, Marketing). As many startups struggle to complete those 3 core functions since they are focused on product/service delivery and fundraising.