Why Startups Fail at People Management (2025 Insight): Lessons from HR & Product Expert Anna Bolgova

Why do so many startups fail at people management? After 12 years in IT as an HR leader and Product Manager, Anna Bolgova has seen the same pattern repeat: founders overhire, then downsize, while HR teams chase trends instead of solving real problems.

Today, as an independent HR and product consultant, she helps SMBs automate processes, avoid costly hiring mistakes, and adapt to the new skill-based economy.

We spoke with Anna about HR automation, founder blind spots, and what the future of HR will look like beyond 2025.

HR Automation for SMBs: Where to Start

Many SMBs worry about automation, thinking it's too expensive or complicated. What advice would you give a company that wants to start but isn't sure how?

My advice is to review your analytics and determine where the business is losing the most money, people, or time. Write down all those losses and run them through a product-planning methodology, such as ICE or MoSCoW.

I think you should start by tackling your company’s biggest real problem, not by chasing trends. When you measure and define the issue, you’ll see how costly it is to do nothing.

The Real HR Mistake Most Founders Still Make

You consult for SMBs. What is the most expensive and common mistake you see founders make in people management that you then have to heroically fix?

The biggest and most expensive mistake I see is poor financial planning.

In one company I consulted, the founder would hire several very expensive employees and then fire them 2-3 months later because it turned out the company couldn't afford them; the business hadn't hit its expected profit.

After firing someone, even after a short time, the rest of the team's motivation plummeted. The business also never explained the reasons for these dismissals, and these weren't isolated incidents. Unfortunately, this is a very common story for startups

“The most expensive HR mistake I see in startups is poor financial planning. Founders hire before they can afford it.”

Related reading: From Manual HR to HRIS: Why Smart Companies Choose HarmonyHR

You do a lot of career orientation. What's one 'toxic' piece of career advice that’s still floating around? And what's one non-obvious, practical tip for specialists who feel 'stuck'?

These days, a lot of consultants and companies try to scare people. They say things like, “It’s hard to come back after a career break” or “Changing your track is a one-way street.” That’s just outdated thinking. The IT market has changed, and now fear is used to sell advice.

I believe the most important thing in a job search is your internal state. People often come to me in burnout or fear, and that’s what we fix first.

The other toxic advice is “Everyone must go into IT.” That’s nonsense. IT is a profitable field right now, but there is no guarantee it will remain so in 5 years. My advice: don't listen to anyone. Listen to yourself and go into a field that genuinely interests you, not just where the money is (for now).

– And for those who’ve hit a ceiling?

I’d suggest taking a step back and looking at the bigger picture. Your career is a great space to experiment. Try to observe yourself for a while, explore your interests and strengths, and you’ll start to see new opportunities.

Building Remote Culture on a Budget

Many companies are now 'global by default.' How can an SMB build a strong, unified culture when the team is scattered and the budget for off-sites is limited?

Times have changed. I think companies should have learned how to manage remote teams during the pandemic, instead of trying to bring everyone back to the office. Five years should be enough to get it right.

An "Office-first" policy is the number one sign of incompetent management and poorly built processes. Almost everything, except for backroom intrigues and gossip, can be perfectly implemented in an online format.

And I have to mention the pain point of all founders: the loss of control from not knowing what their employee is doing for all 8 hours. To me, that's a question of workload and task distribution. A good manager must know how to manage their team's time and evaluate their results, not their hours worked.

As for the budget for parties, it's a huge mistake to think that corporate events actually improve team relationships. Relationships are built during the work process.

If a company has built a culture of trust and acceptance, people will be willing to pay for their own vacations just to meet up with colleagues. Conversely, in a toxic atmosphere, many wouldn't go to Paris for free to "network."

Burnout vs Fatigue: How HR Can Tell the Difference

Your hobby-finding project—is that a symptom of our times? Are we all just burned out? And how can an HR manager tell the difference between a 'tired' employee and a 'professionally burned out' one?

Partly, yes. I launched it while living in Armenia—it helped migrants adapt and find community. Work can’t solve everything, especially for relocated families where one partner doesn’t work in IT.

As for burnout, it’s important to distinguish it from tiredness.

Tiredness comes from difficult tasks or a high volume of them. It goes away after rest. Burnout stems from feelings of powerlessness, uselessness, and a lack of results. The most burned-out employees are the ones who told their managers—more than once—what was wrong, but were not heard.

How can HR tell the difference?

That’s where experience matters. Senior HRs intuitively feel it. If not, use logic. Track who this person is, how long they’ve been here, what they said in 1-on-1s, and how their team feels. Patterns will appear.

“Burnout comes from powerlessness — when people speak up and aren’t heard.”

Key HR Metrics Every Founder Should Track

As a product manager, you must love data. What are 3 HR metrics you’d force every CEO to put on their dashboard to really understand what’s happening with their people?

• Turnover Cost
• Hired Employees per Month
• Retention Rate

But metrics are just numbers. To truly understand what’s happening, you have to talk to people, and they’ll only speak honestly if they’re not afraid of being fired for an unpopular opinion.

See also: 8 Key HR Metrics Every Manager Must Track in 2025

HR Trends 2025 That Look Great on Slides (But Fail in Reality)

What’s an HR trend for 2025 that looks great on slides but is failing in practice?

The attempt to mass-automate everything at once. For example, AI-recruiting without any human involvement.

Right now, AI knows how to sort, but it doesn't understand context or potential. I've had many cases in my practice where we hired people without a specific vacancy. I'd find a potentially great specialist, we'd talk, discuss what company problems they could solve, and open a position for them.

AI interviews are the same. Cool, sure, but a person opens up in conversation. In interviews, it’s critical to go deep on experience and motivation, not just run through a template. That’s why in your first question, I put "reviewing mid-level+ resumes" and "conducting interviews" in the "Keep This Human" block.

The Blind Spots in Modern HR (Skill vs Title Economy)

You have a unique cross-functional view (IT/HR/Business). What 'blind spot' does the entire HR industry have right now?

Two, actually.

1. Skill economy vs. Title economy

Many companies still evaluate people by their job title, not their skills. The market is already operating on a "skill economy" logic, but HR systems are stuck in a "title economy." By 2026, this will lead to a mismatch crisis: excellent specialists won't get hired because they "don't fit the role." In fact, it's already here in 2025.

2. The talent reserve Is a lie

That classic line, "We'll call you if a suitable position opens up," almost never works. A new vacancy appears, and the search starts all over again. Most companies are terrible at managing their existing candidate database.

“By 2026, the mismatch between job titles and real skills will become the biggest hiring crisis.”

The Future: HR as a Service

What skills will be critical for HR specialists in the next 3 years?

HR specialists need to understand the business value they personally deliver. With automation, simple "sourcers," "checklist interviewers," and "HeadHunter-scrollers" won't be needed.

I would bet on the development of HR as a Service. HR, like any specialist, must solve the company's key business pains. Therefore, I’d recommend mastering HR analytics, team management processes (like facilitation), acting as internal career experts, and, of course, knowing how to use AI tools.

If you could go back 10 years, what one piece of career advice would you give yourself?

Trust your intuition. Don't stay around people whose mindset doesn’t align with yours. Find your people. Explore yourself, go toward what interests you, what makes your eyes light up.

Be bold and brave. Believe in yourself. The world is full of great companies, interesting fields, and wonderful people. There is no sense in staying anywhere you feel uncomfortable, even for the most subjective reason.

“Trust your intuition. It’s the best HR analytics you’ll ever have.”

Key takeaways for founders and HR leaders

• Don’t overhire — plan financially first.
• Automate HR tasks where they add measurable ROI.
• Detect burnout early; track engagement patterns.
• Hire for skills, not titles.
• Keep AI as a tool, not a replacement for humans.
• Culture = trust + clarity, not off-sites and slogans.

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