What to get right when you have no HR team
- Jenny Hartley
- Mar 5
- 4 min read
Updated: Mar 11
One of the most common things I hear from founders is: “We don’t need HR — we’re not that big.” - And often, they are right. Most start-ups and growing businesses don’t need an HR department, a People team, or layers of process that feel heavy and corporate. In fact, adding too much structure too soon can work against the culture the founders are trying to nuture.
But there’s a quieter truth that tends to get missed:
You may not need HR — but you do need to get the foundations right.
When people issues crop up, it is rarely because you did not have an HR department. More often, problems start when expectations are not clear, agreements are not written down, or decisions are not applied consistently—from day one. As your business grows, the admin and legal sides of managing people build up fast. Before you know it, you are caught up in employment contracts and compliance requirements.
What founders think when they say “we don’t need HR”
In my experience, founders are not rejecting People/HR support. They are rejecting what they perceive it to be:
Overly complex policies no one reads
Cautious advice that slows the business down
Processes designed for large corporations
A fear of losing flexibility, trust, or momentum
Those concerns are completely valid. However, good people practices in small businesses should not resemble bureaucracy. It should be supportive — something that aids the business in progressing confidently, rather than hindering it.
This is not about the size of your business
One of the biggest misconceptions about HR or people basics is that they only matter once a business reaches a certain size. In reality, headcount matters far less than clarity and consistency. People foundations are about how expectations are set, decisions are made, and what happens when circumstances change. That is just as relevant when there are only two or three founders, no one is formally employed yet, and there is complete mutual trust. That is often when assumptions are strongest and least tested, which can lead to issues down the road.
The founder version of “we’ll sort it later” and its consequences
I often see this play out long before a business employs its first person: founders build something together based on trust, shared energy, and momentum. Their roles intersect, decisions are made swiftly, and aspects like equity, responsibilities, and exit strategies are vaguely understood or not addressed. At that moment, it seems natural since the relationship is solid, and everyone is on the same page.
Most of us have also seen how this can change:
A great working relationship can change. Growth, new pressures, shifts in personal circumstances, or simply different visions for the future can all have an impact. When nothing has been written down, disagreements can quickly feel personal. You might find yourself asking:
Who actually decides this?
What was originally agreed?
What happens if one of us wants to step back — or leave?
Without clarity, these situations can become disruptive, emotionally draining, and expensive, often leading to difficult exits that could have been far cleaner if expectations had been agreed early.
This is why founder agreements matter. Not because you don’t trust each other — but because trust deserves protecting.
The same principle applies once you employ people.
The pattern remains the same when a business starts hiring. When agreements live only in people’s heads, everything works — until it doesn’t. This is where I see problems arise:
Different performance expectations
Diverse interpretations of flexible working arrangements
Pay progression or role scope
How issues are handled when someone struggles
These issues affect your business in two key ways:
Legal Risk: If expectations are unclear or not applied consistently, your company can face significant challenges under UK employment law. This is especially true for areas like performance management, absence, and handling disciplinary matters.
People Impact: On a human level, a lack of clarity leads to confusion and erodes trust within your team.
What “getting it right” actually looks like or What to get right when you have no HR
In growing businesses, strong people foundations tend to be:
Proportionate — only what you actually need
Clear — written down, but not over-engineered
Consistent — applied fairly, even when it’s uncomfortable
Human — recognising that people are not policies
In practice, this means:
Employment contracts that are legally robust and reflect how people really work
A small, relevant set of people policies
Managers who understand their responsibilities
Founders who are not carrying every people decision alone
This is where a fractional HR or People Director adds the most value — not by “installing HR”, but by putting structure around what already matters to the business.
Enough to reduce risk and enough to create clarity. Without losing what makes the business feel like itself — and without slowing it down.
A final thought
Not needing an HR department doesn’t mean people foundations aren’t important.
It usually means they’re informal, assumed, and heavily reliant on goodwill. Whether you’re founding a business, hiring your first employee, or growing a team, the same principle applies: clarity early - prevents conflict later. This is what you need to get right when you have no HR.
Getting the basics right isn’t about planning for failure. It’s about protecting relationships when things inevitably evolve.
Want to talk it through?
I work with growing businesses as a Fractional HR Director, supporting founders and leadership teams to put practical, proportionate people foundations in place — without unnecessary complexity.
If this article resonates and you’d like to explore what “getting it right” might look like for your business, I’m always happy to have an informal conversation.
We give you an hour free consultation. Book Your Free Consultation
You can contact me via jenny.hartley@anchoredin.uk and we can take it from there.
Disclaimer
The information in this article is intended as general guidance only and does not constitute legal advice. Employment law and best practice can vary depending on individual circumstances, and businesses should seek specific advice before taking action.
