Building an HR Function from 0-1

As your team grows beyond a few founders and early hires, HR goes from a few Slack messages and spreadsheets to something that needs structure.

But if you’re a founder or the first HR hire, you probably don’t have time (or budget) for bloated systems or fancy strategies. You just need to know: what’s essential, what’s not, and where to start.

Basically, you need to know when is the right time to invest in HR, and what does “just enough” look like for a company with around 50 employees or less?

This guide walks you through how to set up a basic but effective HR function when you're starting from scratch, without over-investing time or budget.

When Is the Right Time to Invest in HR?

Start building HR basics around 15–25 employees.

At that size, things like payroll, onboarding, and policies start to break without structure. You’ll also likely hit regulatory thresholds that require more formal processes—especially in countries like Sweden and Norway, where local labor laws kick in early.

In Sweden, for example, you're required to maintain written employment contracts from day one, and benefits like paid parental leave and union engagement might need your attention. In Norway, you're obligated to comply with Arbeidsmiljøloven (Working Environment Act), which requires clear employment terms, a safe working environment, and documented working hours. These might not feel important around 5–10 employees, but more than that and it’s time to start looking at these regulations in more detail.

If your team is distributed or hybrid, getting even basic HR infrastructure in place can reduce friction, improve retention, and help you scale responsibly.

Where Should You Start?

Here’s a simple framework for where to focus your limited time and resources.

High Priority (First 60 Days)

Recruiting Process

Create a consistent hiring workflow: job descriptions, interview plans, and a simple scorecard or evaluation system. Use tools like Teamtailor or Recruitee for a Nordic-friendly ATS. Ensure all job offers and employment terms follow Swedish LAS (Employment Protection Act) or Norwegian Arbeidsmiljøloven, as mentioned previously.

Even if you’re not hiring right at this moment, it’s important you get the basics in place so the moment you do decide to bring more people onboard, you know where to start.

Onboarding Checklist

Standardize onboarding as much as you can. This should really just cover the basics like outlining the workspace setup (e.g., computer, desk, phone, subscriptions, etc.), getting the new hire into your systems (e.g., Slack, Google, BambooHR, etc.), a welcome session with the founder(s), some casual coffee chats during the first weeks, and a 30- and 90-day check-in. We always recommend taking a more hands-on approach to pre-boarding and onboarding, but you might not have the time right now. So a simple checklist of equipment, a formal welcome, coffee chats, and some check-ins will suffice.

NB! Also include necessary documentation like ID verification, GDPR consents, and tax forms (e.g., A-melding in Norway).

Payroll, Contracts & Benefits

Use local providers or platforms like Huma (Norway) or Pensure (Sweden). Ensure contracts are compliant with local labor law, and register employees with relevant authorities (e.g., NAV in Norway, Skatteverket in Sweden). Include mandatory pension enrollment (ITP in Sweden, OTP in Norway). Local SaaS providers like Huma and Pensure should be able to point you in the right direction for some of this documentation.

Employee Handbook (Simple Version)

Only cover the essentials: working hours, office access, remote work, anti-harassment, leave entitlements, and other statutory employee rights. Keep it readable and relevant.

If you have the time and want to beef this up a bit, you can also include content related to your mission, vision, values, and perks. We like to keep our employee handbook in Notion, since it’s an interactive tool and can be easily updated or commented on by anyone in the organization.

Legal Compliance

Store written employment contracts, GDPR consents, and ensure you're aligned with local employment laws (e.g., anti-discrimination policies, workplace safety obligations, whistleblower protection). A great place to store this information is in an HR system such as Bamboo, HiBob, Huma, etc.

Medium Priority (60–120 Days)

Performance Conversations

Start with quarterly check-ins. Don’t overbuild—keep it about goals, feedback, and development. Keep all documentation in case of future disputes. We recommend using a tool like Leapsome, which can help you keep all feedback documentation in one place, and makes it easy for you to review your peers anonymously.

Manager Support

First-time managers need structure and a strong foundation around them to lead a team through different growth phases. Offer templates, manager forums, feedback frameworks, and guidance on tricky conversations. Be mindful of union regulations and co-determination laws (e.g., MBL in Sweden). Also keep in mind that the skill set you need in your managers will change quite a bit as your company grows. So even though someone made a great manager at 30 employees, it doesn’t necessarily mean they will be a great manager at 75 employees.

Culture and Values

Define and document your company values. Highlight them during onboarding, all-hands meetings, and performance discussions. Involve employee feedback to align as needed. Also, keep in mind that having benefits that reflect your values and are closely tied to the mission and vision of what you want to achieve is a great way to reinforce this message. For example, if one of your values is “autonomy,” offer flexible working locations.

Low Priority (Do Later)

Detailed compensation bands or career paths.

Start with a simple leveling framework — entry, mid, and senior levels. Balance equity with salary, but avoid overcomplicating things in the beginning. Equity compensation will naturally become more sophisticated as your company grows. If you want to learn more about startup equity trends, check out this article by Carta.

Internal training programs or complex L&D programs.

In a small team, you’ll hopefully have a lot of colleagues with a founder mentality. This means that a lot of learning and progression will happen on the job as employees ebb and flow between responsibilities. Give people a development budget, but don’t overly dictate what they spend it on—and you definitely shouldn’t invest in complex L&D programs since your company might look very different in a year’s time.

Complex HR software integrations.

Startups are lean, and they tend to focus their time on achieving efficiency and scalability. But honestly, early on you don’t need to over-engineer your process with workflows and integrations. Why? Your tools might change, your processes will shift, and you might spend a lot of time setting up integrations that will become redundant.

Lengthy engagement surveys.

If you aren’t more than 50 people, you should have a pulse on how things are developing in your team. And a lengthy engagement survey won’t bring you enough structured data to make meaningful decisions. Instead, opt for something simple (around 5–10 questions), send out short pulse surveys as needed, and keep a communication line open between the employees and management for any issues that may arise.

HR vs. Talent: What’s the Difference in a Small Team?

In early-stage companies, it’s common for one person to cover both HR and Talent Acquisition. But they will essentially wear two different hats.

If you’re hiring rapidly, recruiting takes the lead. If hiring slows, invest more in internal people processes until hiring picks up again. While there are synergies between these two functions, there’s not a lot of efficiency that can be gained from overlap. So keep in mind that expecting everything to get done quickly on both fronts is unrealistic.

What Not to Focus On

Okay, so you’ve decided to get your HR team up and running. Even though you have an idea of what your must-haves vs. nice-to-haves are, there are still some common traps to avoid when setting up HR from scratch.

Too much tech too soon. You don’t need a full-blown HRIS like BambooHR when you’re less than 25 people. Use Notion, Google Drive, and local payroll platforms.

Overbuilding policies. A 40-page handbook isn’t better than a 10-page one. Focus on statutory rights, company culture, and clear processes.

Rigid performance systems. Semi-annual reviews and 360 tools are overkill. Start with simple check-ins on Leapsome and grow from there.

Perks over fundamentals. Office snacks are nice, but legally compliant contracts, pensions, and clear onboarding matter much more. Let your early employees co-create your perks and shape your culture, benefits, and values as time goes on.

A Quick 0–1 HR Setup Checklist

High Priority

Offer letter and contract templates (localized for Norway/Sweden)

Payroll provider + pension and tax registration

Hiring process: standardized job ads, interview guide, feedback forms

Onboarding checklist (workspace, tools, team intros)

Light employee handbook (5–10 pages max)

Legal compliance basics: GDPR, contracts, anti-harassment

Medium Priority

Quarterly performance check-in template

Simple feedback guidelines for managers, and a manager meetings/slack channel.

Values doc shared in onboarding and all-hands

Offboarding checklist

Low Priority

Career paths and role leveling

Full HRIS system

Engagement surveys

L&D programs

As startups grow past the early chaos of founding teams and first hires, one thing becomes clear: you need structure. You need consistency in how people are hired, onboarded, paid, and supported—and that’s where HR comes in.