SMEs vs. Startups: Two HR Contexts, Two Approaches

Maurizio Ridolfi
Jan 14
3 min read

What leaders need to know before structuring their HR

📋 Summary

SMEs and startups often share the same reality: limited resources and an urgent need to structure their human resources.

However, their operational contexts differ profoundly and call for radically different HR approaches. Copying and pasting an HR model from an SME to a startup (or vice versa) can prove counterproductive, or even dangerous.

This article helps you identify your context and lay the right foundations for HR management adapted to your reality.

The mistake that 8 out of 10 leaders make

Imagine the scene.

The founder of a rapidly growing startup decides to implement the same HR processes as his former employer, a well-established industrial SME. Three months later, his best talent resigns, stifled by a rigidity that clashes with their entrepreneurial spirit.

Conversely, a manager of a family-owned SME , seduced by the "agile" methods of startups, abandons his tried and tested procedures.

The result : confusion, disorganization and a loss of bearings for employees accustomed to a clear framework.

These two errors have a common origin: not having taken the time to understand one's own context before structuring one's HR function .

SMEs: the strength of stability

A small or medium-sized enterprise (SME), whether family-owned or not, is generally characterized by a certain level of maturity. It has a history , an established corporate culture , and processes that have proven themselves over the years.

In this context, the HR function is structured around several pillars:

The preservation and transmission of know-how
Workforce planning and skills management
Maintaining a balanced social climate
Optimizing existing processes

The main challenge? Avoiding inaction.

An SME must know how to evolve without losing what makes it strong: its stability and reliability.

The HR function plays a role in both guardianship and facilitation of gradual change.

The startup: the art of building while walking

The startup operates in a radically different world . Young and often financially fragile, it must demonstrate exceptional agility to survive and thrive. Resources are limited . Every decision counts double.

In this context, the HR function often does not exist as such. It is the founders themselves, or multi-skilled employees, who assume this responsibility in addition to their other duties.

The HR challenges of a startup focus on:

Attracting talent despite limited financial resources
The gradual construction of a distinctive corporate culture
The flexibility of roles and responsibilities
The ability to pivot quickly in the event of strategic change

The trap to avoid? Completely neglecting HR structuring under the pretext of agility.

A startup that grows without laying solid HR foundations exposes itself to painful growth crises.

Three questions to identify your context

Before embarking on structuring your HR function, ask yourself these three essential questions:

What is your time horizon? SMEs typically operate on 3- to 5-year cycles. Startups often work in 6- to 18-month sprints. This difference directly impacts the nature of the HR policies that need to be implemented.
What is your level of predictability? The more stable and predictable your business, the more structured HR processes you can afford. The more uncertain it is, the more you should prioritize adaptability.
What is your management culture? A highly hierarchical organization will not require the same HR practices as a horizontal structure where everyone wears multiple hats.

The approach that works: adapt without denying yourself

The good news? There is no universal HR model , but there is a universal method: start from your reality on the ground .

Whether you run an SME or a startup, the first step is always to take an honest look at the situation.

Where do you really stand?
What are your immediate needs?
What resources do you have available?

Next, it's about building a tailor-made approach , neither too rigid nor too vague. An approach that respects your context while preparing you for the next stage of your development.