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Best Practices

HR Assessments for Start-ups and Small Companies

By Deb McClanahan, BroadBandHR Consulting

You're a start-up with 10 people — you don't need an HR Department — that's for larger and more established companies, right? Wrong — you do need some Human Resources component, even at 10 people. Ideally, you need some HR component as part of your planning process before the company launches.

Also, during challenging times, small companies (like everyone else) need to assess all avenues to improve profits and revenues. Successful companies know that good financial results start with a culture where employees are accountable and are rewarded based on their performance. Successful companies also know that every function needs to provide value and act strategically as well as tactically.

An HR Assessment can provide insight into ways to manage risks to the company that have not previously been accounted for. Such an Assessment can also help identify gaps in the company's plans and the "how to" for achieving business objectives. An HR Assessment can also evaluate the effectiveness of current processes and any areas where you have compliance and/or legal issues. The most effective Assessments are performed by outside consultants to achieve objective results — some organizations may term this an HR Audit.

A well-designed HR Assessment will fit your organization at its current age and stage, and grow with you as your organization grows. The intent is not to be administratively burdensome, but to provide guidance on how to improve your organization's productivity and achievement of business goals. More than the classic "HR Desk Audit", this is intended as a business-focused assessment that leads to positive changes for the company. Specific Assessments will be developed to fit your organization.

Sample Assessment Questions

Business Objectives

  • Does the organization focus on the few critical variables that make the business work? Do Executives have the tools and staff to achieve these objectives fully and on time?
  • Does the organization's culture balance its ideals with common sense?
  • Does the organization have a strategy for going beyond its initial product or service?
  • Is there a plan to create sustaining revenue beyond the initial launch?
  • Does the HR Plan support the achievement of business objectives?
  • Is there a regular review of the HR Plan to ensure it matches the business objectives as they change?
  • Who monitors headcount and how?
  • Are appropriate hour and cost control measures in place if hourly workers are involved?
  • Who conducts performance evaluations for Executives? Is there a consistent process in place for development for Executives?


  • Is a standard and validated employment application in place?
  • Is a signature and release process in place?
  • Do you have a standardized selection process for each type of position?
  • Are job descriptions up to date and used for recruiting purposes?
  • Are employment practices aligned with various anti-discrimination laws?
  • Is there a regular review of these practices?
  • Is there a need for an Affirmative Action Plan?
  • Are minors treated properly for employment?
  • Are non-residents treated properly with respect to employment and employability?
  • Do current employees know of job openings as they occur?
  • Is "at will" employment the standard? Do employees know this?
  • Are reference and background checks done in a standardized way?
  • Where bonding is required, is there an outside provider?
  • Where outside resources are used for recruiting, do recruiters have agreements in place?


  • Is there a standard process for on-boarding new employees?
  • Are new employees made aware of workplace policies?
  • Is there an Employee Handbook?
  • Is there a process of preparing for new employees (phone, computer, desk, badge/building access, etc.) before their start date?
  • Are managers instructed in on-boarding activities?
  • Is there a pre-employment checklist in use?
  • Do new employees complete W-4's?


  • Are the legally required postings in place?
  • Are employees trained on company policies and work rules?
  • Are managers trained on company policies and work rules?
  • Are employees properly designated as exempt or non-exempt on FLSA?
  • Are contractors properly documented and paid?
  • Is working time documented?
  • Are appropriate payroll withholdings done?
  • Are I-9's and medical information separated from employee files?
  • Are all new hires reported to the IRS and any state as required?
  • Are paid time off structures in place and properly administered?
  • Are non-exempt employees compensated correctly for any hours worked beyond 40?

Performance Processes

  • Is there a process for evaluating employee performance?
  • Does it include addressing development issues?
  • Does it include addressing poor performers?
  • Is there a formal pay structure
  • Is there a formal review of employees' compensation within that structure?
  • Is there a standard review of pay against the marketplace?
  • Are there incentive systems in place to recognize performance?

Safety & Security

  • Is there a process for preventing and reporting work hazards?
  • Is the work environment regularly reviewed for safety and security?
  • Are structures readily accessible to all employees including those with disabilities?
  • Are access measures in place throughout the workplace to accommodate those with disabilities?
  • Are security measures in place for general usage?
  • Are employees aware of those measures?
  • Are specific emergency and business continuation measures in place for data centers, networks, computers, and other electronic equipment?
  • Are appropriate back-up procedures practiced regularly?
  • Are emergency procedures including disaster and pandemic processes in place and regularly reviewed?
  • Are routine measures in place to prevent unauthorized access threats that might endanger employees?
  • Is there a reliable emergency response system in place?


  • Are employees informed about their benefits?
  • Are COBRA notices provided as required by law?
  • Are FMLA and any state FMLA requirements adhered to?
  • Are benefit plans and documents in compliance with ERISA?
  • Are employees and managers properly trained in employee absence versus FMLA requirements?
  • Is employee health information kept in compliance with HIPPA requirements?
  • Are Form 5500's completed and reported in timely manner?
  • Are workplace injuries/accidents investigated?
  • Do workers' compensation cases receive appropriate remediation?
  • Are there return to work programs in place?
  • Are insurance programs and premiums reviewed for competitiveness?

Employee Issues

  • When employees have issues, are there Open Door or other mechanisms available to resolve them?
  • Do employees have ways to express disagreement with performance evaluations without retribution/retaliation?
  • Are there multiple channels for employees to pursue issues through?
  • Are workplace policies flexible enough to handle the needs of the business?
  • Is the complaint process clearly communicated to employees?
  • Are employees trained on discrimination issues?
  • Are managers trained on discrimination issues?

Records & Documentation

  • Are Employment & Selection process records retained for the appropriate length of time?
  • Are personnel files up to date?
  • Are Payroll records properly documented and retained?
  • Are Benefits enrollments, records, and Summary Plan statements available as needed?
  • Are exit interviews conducted prior to employee separation?
  • Are final paychecks provided on time?


  • Computer Technology
  • Consumer Products
  • Financial Services
  • Life Sciences
  • Enterprise Software
  • Professional Services
  • DME & Medical Devices


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