When Is the Right Time to Hire an External HR Consultant for Your Startup

At a certain point in every successful startup’s lifetime, the founder thinks – do I really need an HR department? While startups are most often teams with not more than a handful of people, there is an emerging need for HR roles – which can be filled with an external HR consultant.

Hiring remains one of the top challenges for startups, but few choose to delegate the work to an outside source. Let’s find out what an HR consultant brings to the table, whether you really need their services and what they can do to improve your recruitment, screening, and workflow.

Why an external HR consultant?

Many startups are strapped for cash and value each cent that they spend. As such, it’s not unusual to see tech companies with only a handful of employees. Seeing how it takes over $7,000 to hire someone new for your team, as well as 8-26 weeks for them to get familiar with their role, it’s reasonable startup CEOs are very careful with hiring new people.

Understandably enough, an HR manager or consultant is not very high on the list of priorities for a growing startup. There are developers, marketing managers, business development managers and others who are much more crucial to a startup’s success in the early stages.

Source: Business2Community

Trouble is, at some point, you will need to hire those exact people, without the help of an HR team. This is where external HR consultants come in. You get to have help with your HR tasks without hiring a full-time employee – it’s a win/win situation. 

Speaking of which, what are the tasks of an external HR consultant anyways?

The duties of an external HR consultant

What kind of work and how much work an HR consultant does for your startup varies greatly from one case to another. Here are some of their main duties:

-        Developing HR policies and procedures

-        Recruiting

-        Employee training and development

-        Ensuring HR programs are in compliance with the law

The one aspect that most startup owners are interested in is the recruiting and hiring of new employees.

So, when is the right time to hire an external HR consultant?

It depends on many factors, as no two startups are alike. However, there are a few tell-tale signs that you need the help of an HR expert. Here are some of them, along with the ways an HR consultant can help you out.

You have very few candidates

One of the biggest challenges for startups is hiring new employees. No matter how big a company is, a new member coming on board can greatly influence the direction where the company is headed. This is even more important when you have a team of 5-10 people, as every new hire is crucial.

Let’s face the hard truth. Nine out of ten startups fail, which is not exactly a good career perspective for anyone looking for a job in a startup. When they apply with you, a candidate is making a 1:9 bet on you as their employer and knowingly entering a relationship that is likely to fail.

Source: Ere


Then there’s the actual work. I’ve had the pleasure (mostly) of working in a startup or two. While the roles are specific, such as marketing, product, sales, etc., in general, you need to go far beyond your job description.

This means that the CEO does the accounting, the marketing manager helps out with website design, the sales team pitches in with email marketing, and writers help pitch new clients. It’s an environment where you don’t get to say "It’s not my job." – because there’s no one else to do it. You are forced to wear many hats and go beyond your comfort zone, getting your hands dirty along the way.

There are other risk factors, but these two are enough to make applicants stay away from startups as a career choice.

The role of an external HR consultant is to present your company in the best light and attract quality candidates. They can do this through marketing channels, by creating a hiring magnet, networking, participating in events, and many other tactics.

You have too many candidates

When I was fresh out of college, I was working as a customer representative for a US-based startup. As one day the CEO was presenting the workflow, I naively asked “But what if too many people call me at once?“, to which I got a smile and „That’s a great problem to have, and I hope we have it“.

Given the previous point, you may think that having a boatload of candidates for your startup is the opposite of a problem, but you would be far from the truth. Once the excitement over so many applicants settles down, you’ll realize one thing – someone has to go through all of those applications.

We’ll assume you really want to hire the best person for the job, which is anything but easy. If you follow a good screening process, it can still take hours or even days to sort through the applications and find a candidate worth an interview.

Right now, you may be thinking – wait, there’s no way a startup could get that volume of applicants. In reality, it happens, especially if you’re open to remote applicants. For example, our sister company Toggl gets more than 1,500 applicants per position.

An external HR consultant can help you with the job advertisement, candidate screening, interviewing, pre-employment testing, interviews and getting the applicant on board, which is our next point.

Your onboarding process is weak

Suppose you have the time and manpower to hire someone great for your startup. Now comes the hard part – getting them introduced to their role and your team. Even the hardest-working, most dedicated employees will struggle without a proper onboarding process.

First off, does your employee feel welcome as soon as their offer is accepted? The moment someone accepts to be a part of your team, you should stay in touch. Even if they’re starting a month from that point, make them feel at home before they even clock in their first day.

The second, equally important part is letting your current employees know about someone new joining the team. If you can’t communicate their role, their everyday duties and how they fit into your existing workflow, you just may need an external HR consultant to help you out.

Finally, and most importantly, your new hire needs to be familiar with your existing work processes and how their role fits into them. For many startup founders, this is the most difficult part of onboarding, as they don’t know which direction to go to. If you’ve never had a web designer, how do you onboard one?

An external HR consultant can set you up with a great onboarding process that is repeatable and scalable, so that your team can welcome every new member with their hands open.

Your candidate experience is a mess

Does it take an average of 30 minutes for a candidate to apply for a job at your startup? Does your candidate have to jump through hoops to get you to take a look at their application? If the answer is yes, some changes are in order.

While you set out to find the employee of your dreams, applicants are out on the hunt to find their ideal employer. A poor candidate experience is a sign of poor workplace experience, and it can cause a lot of things to go wrong.

Source: TalentLyft


From an application that’s not mobile friendly, to a vague job title and description, to misaligned communication with the applicants, there are many mistakes that HR-less startups make in their hiring efforts.

By working with an external HR consultant, you’ll be able to spot flaws in your candidate experience and ensure that applicants see your startup as a great place to work before they even go in for an interview.

You need to hire a lot of people – fast

So, you think you can handle it all – you’ve hired a new social media manager or accountant and you think you’re the HR guru, so you start giving out recommendations to your friends on how to hire the best talent out there.

Then you’re faced with a different kind of situation. You get approved VC funding, an angel investor finds your idea interesting, you get an unexpected cash flow and you want to expand your team. Let’s say you want to hire 10 sales development representatives within a month.

No matter how skilled you think you are, there’s only so many hours within a day. If you need to hire a lot of people at once, the amount of work could be overwhelming. Putting out job ads, sorting applications, screening, interviewing, making offers – it’s no small feat for someone whose hands are already full.

An external HR consultant can help you out in times of crisis like these and breeze through administrative tasks while you do the job you do best.

You don’t know how to assess candidate skills

Remember how everyone does multiple jobs at a startup? When you want to hire someone new, you need to know if they have the skills to match the job. And even though CEOs and co-founders are a capable lot, they can’t be familiar with every job in the existing market.

For example, you’re faced with a situation where you have to hire a Java developer but the only thing you know about Java is that it’s a type of coffee and the name of an island near Bali.

Source: Statista

In situations like these, it’s easy to get duped by an applicant and take their word for granted. You could go the alternative route and put faith in their CV instead. However, you’ll find that applicants tend to exaggerate in their resumes quite a lot.

One of the things you can do is hire an external HR consultant. While they may not be a Java developer themselves, they’ll have the know-how to test the candidate for any given skill set.

Alternatively, you can try out Hundred5 as a way to assess candidate skills, even if you know very little about the position. We have a long list of pre-made tests for technical roles such as developers so that you can make educated hiring decisions, with little to no knowledge of the task at hand!

Do you need an external hiring consultant?

If you’ve answered yes to any or all of the previous statements, you most likely do. At a certain point in every successful startup, it’s time to grow and let new people pave the way forward. Instead of fearing this, embrace it as a way to propel your startup forward. And if a little external help is necessary to gain momentum, don’t be shy to ask for help.



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