Ask the Experts: When Should Your Growing Company Establish HR?

Diana-Martz by

In this first of a three-part series, we’ve gathered four of the best HR experts around to shed light on some of the top HR issues and challenges facing expansion-stage companies.

The HR Question: It’s something that all startup and expansion-stage companies have to deal with. Founders and CEOs may recognize how central a healthy company culture and recruiting strategy are to growth and success, but when it comes to establishing human resources policies and procedures their eyes tend to glaze over quicker than you can say “compliance”.

Outsourcing has its benefits as well as drawbacks, as does distributing HR responsibilities in-house, but both may be stopgap measures rather than long-term solutions. Eventually, you’ll have to face the HR question head-on. And the longer you wait, the more likely you’re missing opportunities and digging yourself into a hole.

That’s why we’ve gathered a group of skilled and knowledgeable experts who can help.

Over the next few weeks they’ll be sharing their insights and answers to such questions as: How do you know when it’s time to establish HR? What role(s) should you prioritize? What tools/solutions should you utilize to make your organization as effective and efficient as possible?

The first question we asked them:

When should a growing company first establish an HR department? What should it look for in its first HR hire?

Tim Sackett, President at HRU Technical Resources, Fistful of Talent blogger

The decision of when to establish an HR department is so dependent on how people-centric your business is and how HR savvy the team you already have in place is. I don’t think there is a magic number. I’ve seen companies grow to almost 100 employees without any HR folks, but they had good leaders and vendor-partners who help support the heavy lifting of larger HR-related projects (insurances, hiring, etc.). Great leaders/managers take care of 99% of their own employee relations issues – so hiring the right leaders is critical to HR success.

In a growing company my first hire would be of a Talent Pro who has expert recruiting skills and is organized to a fault. Growing companies need to make the right hires to handle the growth curve, so talent acquisition is critical, and I need a hunter, not a gather when it comes to recruitment. Go out and find me the best talent possible. Great talent can handle most of their own day-to-day HR issues – bad talent creates day-to-day HR issues.

Kris Dunn, Chief Human Resources Officer at Kinetix, Founder of HR Capitalist and Fistful of Talent

50 employees. Look for someone who can recruit and also be your HR lead. Recruiters can learn and do HR well if they’re motivated to, but pure HR people who are more compliance oriented don’t always like to recruit. You’ll need the recruiting support, it’s one of the most important things to have. Trust me on this.

Kathy Rapp, SVP at hrQ, Fistful of Talent blogger

I believe it’s critical for a growing organization to have some level of HR presence from the beginning. Depending on the growth projections, the “type” of HR pro will vary. If the company is just getting going it probably needs a more tactical person to make sure the basics are solid. If the growth strategy is rapid and multi-state or multi-country, then it’s never too early to get a strong HR leader in place. The chemistry fit and assimilation with the leadership team is critical – and waiting to put an HR leader in place will mean that individual is already in a hole.

In terms of what to look for – demonstrated competence in all areas of HR; the desire to roll-up his or her sleeves and do whatever is required in a growing organization; someone who will have credibility with senior leaders and staff; someone who can have fun; and chemistry/cultural fit with the leadership team.

The TribeHR Team

The standard response to this is often “when you have 50 employees,” but we believe it should be more nuanced than that. TribeHR has customers who employ full-time HR managers despite having only 20 or fewer employees, and they do amazing things with corporate culture, recruiting, and onboarding processes.

As soon as HR problems start occupying more than a tiny portion of senior leadership’s time, you should start looking for help. And if the right person comes along — for your first hire, probably a strategically-oriented HR generalist — why wait? Scoop up great talent as soon as you can get it.

Read on as our HR experts discuss the biggest pain point HR can help address and explain which HR tools and software can make the biggest impact at your expansion-stage company.

Photo by: Quinn Dombrowski

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  • Rory Trotter

    Thanks for sharing this, Diana.

    I particularly agree with Kathy’s point that HR is great with helping organizations with scaling up. Process implementation is a big part of what we do as HR pros!

    Good read.

    Keep writing!