Industry
HR Consulting for Startups & Funded Businesses
Startups get HR wrong in a specific and predictable order — and almost all of it is cheap to prevent and expensive to correct.
Why startups HR is a different discipline
Nothing on this page is a criticism of founders. HR failures in startups are almost never decisions; they are the absence of decisions. Documents get downloaded because there is no time. Compensation is negotiated case by case because there is no structure yet. Compliance thresholds are crossed because nobody knew a threshold existed. Each shortcut is rational in isolation, and they compound.
The pattern has a reliable sequence. Contradictory employment documents surface at the first difficult confirmation. Statutory thresholds — the POSH committee at ten employees, PF and ESI shortly after — are crossed unnoticed. Compensation parity breaks somewhere around thirty people. The first HR hire is made too junior to build anything. And nothing gets documented until the day documentation is urgently needed.
All of it is a few weeks of work at ten employees, and a genuinely difficult remediation at a hundred. The cost of doing it late is not just money — it is doing it under pressure, usually with a live problem already in progress.
What goes wrong in startups
Documents downloaded rather than drafted
Offer letters, appointment letters and handbooks assembled from templates that contradict each other on probation, notice or confirmation. The contradiction surfaces at the first difficult exit.
Compliance thresholds crossed unnoticed
The POSH Internal Committee obligation begins at ten employees. PF and ESI thresholds follow. Founders routinely cross these without realising anything has changed.
Compensation set case by case
By thirty people there is no structure, no parity and no defensible basis for the next offer. It becomes visible when two people doing the same job compare numbers.
First HR hire made too junior
Companies hire an HR executive to do administration when what they need is someone to build a framework. The executive is then set up to fail, and the framework never gets built.
Nothing documented until it is needed
Verbal warnings, coffee-shop performance conversations, and a file showing satisfactory appraisals. When an exit becomes necessary, there is no record to rely on.
What I do for startups employers
- One coherent employment document set — offer letter, appointment letter, handbook, core policies, drafted together so they agree
- Statutory threshold map for the next twelve months, with a compliance calendar
- POSH policy and Internal Committee constituted properly, including the external member
- Compensation bands benchmarked to the market you actually hire from
- A performance cycle simple enough to complete every year
- Your first HR hire — defined, sourced, assessed and then supervised
- Salary structuring that will not need retrospective correction
- HRIS and ATS selection appropriate to your size, without overbuying
Statutory exposure in startups
POSH Act at ten employees
Internal Committee with a woman at senior level as Presiding Officer and an independent external member.
Provident Fund and ESI
Registration triggered at defined thresholds, with correct wage definition from the first structured offer.
Shops & Establishment registration
Required per state of operation, and needed for a great deal else including some banking and licensing.
Contractor versus employee classification
Common in early teams and frequently indefensible once the working relationship is examined.
General information on common obligations in this sector, not legal advice. Thresholds, rates and state rules change — confirm your current position before acting.
Most relevant services
HR Function Set Up From Scratch
The complete people infrastructure — policies, letters, onboarding, payroll structure and compliance — built once, properly.
Fractional CHRO
CHRO-grade judgement on a part-time retainer, for companies that need the thinking without the salary.
POSH Compliance & External Member
Internal Committee constitution, external member appointment, training and annual filings under the POSH Act, 2013.
AI Adoption in HR
Where AI genuinely helps in HR, where it creates legal risk, and how to tell the difference before you buy.
Startups & Funded Businesses HR — common questions
At what stage does a startup need HR?
Statutory obligations begin earlier than most founders expect — the POSH committee at ten employees. As a practical matter, informality stops working between twenty and fifty people, when the founder can no longer personally know every employee's situation. The framework is best built just before you need it, not just after.
Should our first HR hire be senior or junior?
Separate the two jobs. Junior HR to run operations, plus senior capability — fractional or advisory — to build the framework and supervise. A CHRO-grade retainer for a few days a month costs a fraction of a senior salary and delivers the part you are actually missing.
Can we hire our early team as contractors?
For genuinely independent, project-scoped work with people who have other clients, yes. For full-time team members working under your direction on your systems, the label will not reflect reality and does not protect you. The exposure includes back-dated statutory contributions and applies to everyone engaged on the same basis.
Our investors asked about HR compliance in diligence. What do they want?
Typically: employment contracts that are enforceable, statutory registrations and filings up to date, correct salary structuring, quantified gratuity accrual, no misclassified contractors, and a constituted POSH committee. Finding these gaps yourself before diligence is considerably better than having them found for you.