Numbers First: Key Human Resources for Startups Statistics

As a rule, nine out of ten startups fail, under 50% of them make it to their fifth year, and 20% fail in the first year. This is a hard and bleak truth, but it makes most entrepreneurs think about how not to get into the mentioned failure statistics. Besides, the failure rate often increases progressively over time. 

A business owner might think that one’s startup is going to hit the big time real soon if it’s been around for a couple of years. But the real situation is the opposite because the small business can go under as fast as it made the grade. 

What’s the reason? Well, you might already know that money-related issues are the most common causes, but not the only ones. Since employees are the most valuable resource of any company, they require proper attention and management. However, startups often have too many concerns to deal with that they forget about their human resources. And that’s when there’s no way back if they don’t tackle this issue right away.

Refusing to take HR seriously is among the top reasons that lead startups to failure. But the small businesses that bring in HR expertise the moment they are ready to turn their ideas into reality are the first ones to go public, get the first-to-the-market advantage, and are the least likely to fail. 

Are you still worried that you won’t be able to take care of another department? That’s when remote HR for startups comes into play.

How can HR boost effectiveness of your startup

Why HR Functions are Important for Startups?

All the startups strive to remain flexible, sought-after, and able to pivot at any time. In most cases, HR and recruiting processes aren’t on the top list of their priorities. Business owners believe that these practices are the startup-culture killers and turn them into corporation-like businesses. 

However, when the activities aimed at establishing HR and recruiting processes take a backseat, the business owners put their startup at risk. 


The abundance of startups works remotely. So, most of the employees don’t know each other and often have to deal with the emerging issues on their own. This leads to the decreased motivation, burnout, toxic work environments, confusion, and weak employee morale and retention. As a result, all the processes slacken, the startup runs out of cash, and there’s no more market need for its products. 

Business owners that use remote HR services for startups show they value their employees and don’t want their company to fail. Such startups boast great results at:

How to understand whether human resource management in small business is what you need?

You might be wondering why opt for remote HR services for startups or create in-house HR department if you feel like you can handle everything yourself? Read our article about questions every CEO should ask himself

First off, delegating tasks is a prerequisite for success. Besides, wouldn’t you prefer to entrust your employees to experienced professionals rather than learn from your mistakes? 

Also, ask yourself about how long it’s been since you addressed at least a couple of the following tasks:

  • boosting employee morale;
  • establishing company culture;
  • ensuring training and development activities;
  • providing detailed performance reviews and feedback to the employees;
  • prevent employees’ firing.

These are the most common challenges business owners face. But thankfully, there are HR solutions for small business for each of the mentioned complexities.

But, after all, why favor remote HR solutions for small businesses if there are many in-house options? If you are a startup with a remote team, it’s more effective to cooperate with experts who also work remotely. They understand what exactly the employees might be struggling with and see the problems you didn’t even know were present. 

And if you are an office-based startup, do you want to open an additional department, deal with all associated issues, pay rent for a larger room, etc.? We don’t think so. That’s why choosing remote HR services for startups is both performance- and cost-effective solution.

remote hr for startup statistics

What are the Most Useful HR Services for Small Businesses?

When opting for remote human resources for startups, your business becomes better in several areas. These include three major stages of managing employees, namely: 

Remote HR services for small businesses help find the right employees

Hiring suitable specialists at the outset will save your time and money in the long run. Remote HR experts help create accurate job titles and job descriptions, and use creative recruitment strategies to encourage qualified candidates to reach out to you. This helps to build diverse teams and easily scale them.

Going through the CVs and conducting interviews might be tricky because tech recruitment takes a lot of time and requires strong experience, especially when you have many other tasks to handle. Usually, the best human resources companies implement structured interview processes that help assess all the necessary skills and identify suitable candidates.

Dealing with complex state and federal laws requires a lot of time and effort. That’s why a human resources startup always cooperates with experts that are well-versed in legal matters and help protect the business from lawsuits.

Best human resources companies help startups ensure a smooth onboarding

Workplace culture directly impacts the newbie’s perception of the company. So, experienced remote HR specialists conduct regular employee check-ins, make sure they are motivated enough, and facilitate activities that strengthen team bonds and make everyone feel that their impact is valuable.

Besides, remote HR startups evaluate employees’ needs and provide development opportunities for them. Usually, they can host management or professional training to help your team members advance their knowledge and improve performance quality. 

Remote HR services for startups handle employee motivation and retention

Fair compensation that matches the average numbers on the labor market and regular salary reviews are among the top factors that make employees stick with the company. Besides, the teams want to receive certain benefits from the company, apart from the standard ones (like paid days off or healthcare insurance). 

Most startups address this topic with creativity, coming up with novel and attractive benefits. You can be confident that your specialist of human resources for small businesses will put effort into making your team happy.

Also, motivation plays a great role in the employees’ approach to work. So, remote hr for startups check:

  • whether employees have enough room for development within the company;
  • if they feel stagnancy on the position, they are offered to take part in career-pathing programs. 

When it comes to human resource management in small business, it takes plenty of time for the business owners to establish all the processes. Besides, nobody guarantees excellent results in this case. 

Therefore, opting for remote HR for startups is a solution that will facilitate your responsibilities and free up a good deal of your time.


Startups that aim to become the next GitHub, Shopify, or Unity can’t do without remote HR services for small businesses. This is a multi-pronged solution that would obviate your headaches and enable you to focus on critical business goals. 

Business owners often take too much on themselves, bemoaning there aren’t enough hours in a day. However, when opting for remote human resources for small businesses, you will hardly ever use this phrase.  

HR Bit is here to become your remote provider of HR for startups. We take care of everything from payrolls to. In other words, let us focus on the HR admin while you focus on growth.

Contact us anytime to schedule a consultation and take care of your most valuable asset—employees.


P.S.: If you aren’t sure about how to choose an HR outsourcing company to benefit from cooperating with it, feel free to check our recent article on this topic.