Why employees leave a start up organization is partly covered in my previous comment which I would reemphasize on adding to list -
1. Long hours of work
2. No brand name in market and hence they don't feel proud to work in a start up company
3. Work-life disbalance
4. Due to low fund inflow, salary delays
5. Salary paid may be lower than industrial average
6. No scope for growth
7. Frustration is more than engagement
8. If the boss starts micro managing, the person would be more frustrated.
9. Deadlines and targets to hit.
10. Benefits offered would be lower
3 HR functions that can be outsourced for a start-up:
It would depend on the person who is working in the HR department, how many HR are there, what is the employee strength, motivational level of employees, etc.
Nonetheless, in general, I can say following activities can be outsourced:
1. Performance Appraisal: It is very difficult to initiate a performance appraisal process and keep your employees motivated. Generating data from a simple form, converting the data to numbers, deriving on certain conclusion is a task. A guidance from a professional appraiser in initial years would actually help you to develop a process of your own.
2. Recruitment: For a startup, it is difficult to source right candidate - educational fit with salary fitment - and hence it becomes essential to understand that if we can hire an external consultant or recruiter to source some candidates for us, it would save us time. Most recruitment consultancies charge you 20% of the CTC offered to 100% of the 1st month salary given to the candidate (most of them also gives a free replacement if the new hired leaves in 3 month's time frame). However, the time saved in sourcing the candidates can be used in some fruitful work. Moreover you can tie up with 2-3 placement agencies and that will help you get the best candidate. You pay only to one whose candidate you hire. Usually there is no fee to be paid when you sign a service agreement, they charge you only when you finalize a candidate they sourced for you.
3. Employee Engagement: As I said, for startups especially, it is very essential to keep the employees engaged so that they can work efficiently, towards the company's interest, be an advocate to the company's brand image, refer the firm in their family and friend circle to do a word of mouth advertisement (which is the most effective branding methods according to most marketeers)
I hope it helped solve your query :-)