When Does Your Growing Company Need HR?

In my previous posts I discussed the steps expansion-stage companies need to take to build and add structure to a new recruiting team. But what about HR?

Recruiters are primarily focused on helping your organization grow with top talent. A recruiter’s job function includes sourcing candidates, interviewing, and helping hiring managers acquire the best employees. HR and recruiting are definitely related, but more like cousins rather than siblings.

How do you know when it’s time to add HR to your company? First, it’s important to understand what HR actually does.

Human Resource’s main functions include:

• Hiring (aka all of the paperwork involved in hiring, not the recruiting)
• Promotions
• Salary Determination
• Performance appraisal review and processing
• Personnel Data Entry and Records Maintenance
• Policy Development
• Visas
• Benefits
• Workers Compensation
• New Hire Orientation

Basically, HR is there behind the scenes to do all of the work to make sure benefits are processed and employees are happy and continuing to develop.

So, when is it time to create your own HR department? It depends, of course. Basically when you begin to see that your current employees do not have the time or knowledge to continue picking up some of the above listed responsibilities.

Of course, some HR functions can be held by a recruiter or manager, such as salary determination or promotions. But when these responsibilities become an impediment to your own job, or to other employees’ jobs then it’s time to hire a full-time HR person. As your company grows and scales, HR will be especially critical to address any employee issues and coordinate benefits information. Having great HR personnel will ensure that your employees are satisfied and always improving.

It is also important to keep in mind that there are many laws and compliance regulations around the workplace. These worries will be taken care of in the form of an HR professional who can make sure your company isn’t breaking any restrictions, and that business is (hopefully!) flowing smoothly with no bumps.

Are you operating a startup or expansion-stage company? What are your thoughts on adding HR to your organization? Have you recently acquired an HR professional? How is it working out?