When is it time to hire an HR employee? - businessnewsdaily.com (2023)

  • HR professionals handle staffing, compensation, development, health and safety, and labor and employee relations. These roles are consistent whether you hire in-house HR or outsource your HR.
  • It's time to hire HR when your business roles are specializing, your company is growing, or your time is better spent on revenue than HR tasks.
  • Outsourcing HR can give you access to a wider range of expertise. In-house HR can lead to better employee relationships with the department and help you stay in control.
  • This article is for small business owners who are deciding whether to hire in-house HR staff or outsource their HR.

Managing employees and navigating the labyrinthine regulations that come with the task is time-consuming and difficult. Hiring new employees, managing payroll, handling grievances and ensuring regulatory compliance are key HR responsibilities. Each of these tasks is a balance challenge. What is a business owner supposed to do when they are already focused on growing the business and ongoing operations?

In the case of young or very small companies, you can always take care of the HR department yourself or outsource these tasks to a third-party company. But at what point is it necessary to hire an in-house full-time human resources employee?

We'll look at HR functions, when to bring in dedicated HR staff and how to tell if this is the caseinternal or outsourcedHR is right for your company.

Editor's Note: Looking for the right HR outsourcing solution for your business? Complete the questionnaire below to allow our distributors to contact you regarding your requirements.

What is HR?

Human Resources (HR) is the process of controlling and shaping all employee matters. The term "human resources" can describe either this work or the entire workforce of your company.

What is an HR employee and what does he do?

An HR employee performs the tasks associated with monitoring and shaping employee matters. Small business owners could initially take on these functions themselves as they own the business and need to keep all the gears turning.

(Video) E32. At what point would you need an HR and in what capacity? Do you think you’re too small?

However, at some point you may want to hire an HR person or team. You can either hire HR internally orOutsource HR.

Regardless of the choice you make, HR professionals will perform five main human resource functions.

  1. Personal:Your HR team uses specificrecruitment strategiesattract potential employees. It will assemble a workforce of employees in various roles, includingPart Time Full Timeand freelance.manage achievementstypically goes hand in hand with this HR function.
  2. Development:Your HR team's commitment doesn't end with the successful hiring of employees. Your team must tooDevelop training programs for new employees, sometimes from a foundation ofBusiness Organizational Psychology.
  3. Compensation:HR staff manage your payroll. They can also play a role in shaping your pay scalesalary rangesyou offer You must clearly state your company's salary structure to stakeholders and employees.
  4. Safety and Health:Your HR team should educate your employees on best safety practices in the workplace. This HR function is especially important when your team is working with potentially dangerous devices, but it always plays a role. After all, something as ordinary as an extension cord running across the floor could cause someone to trip and injure themselves.
  5. Labor and Labor Relations:All disputes between employees are resolved by your HR team. Your HR team can also represent you when your employees unionise, strike or otherwise demand changes to their working conditions. When employee discipline is required, your HR team will enforce itDisciplinary Policyit helped create.

When is it time to hire an HR employee? - businessnewsdaily.com (1)Did you know? HR is also a key player in business strategy, providing data and analysis on topics such as cost management and succession planning.

The importance of human resources

Atypical tasks of a personnel officerThis includes managing the recruitment and hiring processes, training staff and staying currentBusiness Labor LawCompliance and ensuring the workplace runs efficiently. HR specialists also usually deal with employee compensation,service packages, and working conditions. Of course, they also take care of employee complaints or disciplinary cases. The common thread that connects these tasks is that the recruiter acts as a liaison between employer and employee and as a facilitator who prevents or solves problems in the workplace.

"As an entrepreneur, it's really hard to put yourself in the shoes of the employees," said Steve Kurniawan, content specialist and growth strategist at Nine Peaks Media. "We think mostly from the perspective of how we can grow the business - increase revenue [and] win markets - while employees think about their promotions and their personal issues. HR managers, on the other hand, think as employees and are better able to respond to the wishes and needs of employees.”

The benefits that an HR manager brings to a small business are obvious, but at what point in the business lifecycle could you justify the additional expense of hiring an HR manager?

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The right time to hire a Human Resources Manager

There is no one-size-fits-all answer as to when a company should hire an HR manager. The window can shift depending on a company's industry, growth rate, strategic planning, and workload. Instead, look at these indicators to help you decide when it's the right time to bring a dedicated HR professional on board.

When business roles begin to specialize

The general organization of your company is an indicator of when you may need a dedicated HR manager. As companies grow, their employees often move from general roles focused on necessary tasks to more specialized roles and eventually into narrowly focused departments. When this shift occurs, it makes sense to set up an HR department.

"When a company is small, it's normal for everyone to be in 'all hands on deck' mode all the time," said Jordan Brannon, President and COO of Coalition Technologies. “However, with every successful business there must come a point where you are no longer so short of cash and [staff] that you cannot afford to have your people specialize in their departments. At that point, it's time to hire someone from HR.”

When the company grows to a certain number of employees

Business owners could also assess their need for an HR manager based on a milestone number of employees such as 50 or 100. However, according to Doug Coffey, HR expert and assistant professor at Rutgers School of Management and Labor Relations, specialization remains the real differentiator.

"Having an HR manager will likely be a necessity as the company approaches 100 or more employees, but the telltale sign is when the company starts to specialize in functions like IT, sales and operations," Coffey said . "If you need a dedicated manager in these areas, you probably also need the expertise of a human resource manager."

If a focus on sales instead of HR tasks would increase the bottom line

Another way to determine if you could benefit from hiring a full-time human resources specialist is to track your time spent on HR tasks and ask yourself, "Would I be better off spending my time growing the business?" ?

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Once HR tasks start to demand an inordinate amount of attention from a business owner, it may be time to add a dedicated HR manager to the team. If an owner's efforts to increase revenue could cover the cost of a new salary and then some, the choice is clear.

"Business owners should track the time they spend on employee-related matters," said Sharon DeLay, owner and president of GO-HR. “They should then consider what impact it would have on revenue growth if they spent that time growing revenue instead. If the activities to increase sales would far exceed – or soon will exceed – the cost of HR resources, whether outsourced or hired, then it is time to start looking at HR solutions.”

When is it time to hire an HR employee? - businessnewsdaily.com (2)Tipp:If you decide to do HR tasks in-house, that isbest HR softwarecan help you stay compliant and efficient in managing your human capital.

Internes HR vs. HR-Outsourcing

If you're willing to outsource HR work to a new person, you can either hire new employees or hire a third-party company. Both entities have the knowledge and skills to deal with HR in a way that may be more difficult for you. Consider the following factors before making your decision.

  • Cost:In 2019, the median salary for an HR specialist was $61,920. The corresponding number for a HR manager was about twice as high. Hiring another employee will also affect what you pay for benefits andpayroll administration. So ask yourself: is the overall cost of an employee ultimately cheaper than outsourcing?
  • Control:HR staff work directly under your supervision. Outsourced HR firms have to make you happy to keep you as a customer, but they can follow their own internal protocols. If you need control and full transparency over your HR functions, you may be better off hiring HR in-house.
  • Expertise:HR job titles are more diverse than just “specialist” or “executive”. Some HR professionals are experts in specific HR segments—such as compensation or labor relations specialists. If you are looking for an expert in each of these areas, it may be better to hire an HR firm. These firms typically have experts in all areas of the subject, while an in-house staffer or two may lack that specialization.
  • Employee Relations:Employees who work in office environments see each other on a daily basis, and remote teams likely communicate in one way or another on a daily basis. This notion extends to internal HR staff as well, building real relationships with your other employees. Such connections are harder to cultivate when you outsource to an HR firm.

When is it time to hire an HR employee? - businessnewsdaily.com (3)Key taking:Delegate HR functions to one of theThe Best HR Outsourcing Companiescan connect you with better expertise. Outsourcing HR can also lead to a loss of control and pose challenges to employee relations.

The risks of working without an HR specialist

Business owners may feel like they can do it on their own, and maybe they can, but failing to hire a human resource manager carries risks that can escalate into serious consequences, both organizationally and legally. Before you decide not to hire a hiring manager, you should be aware of the potential problems you are putting your company at risk.

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confusion and dissatisfaction

Not having a knowledgeable HR professional can lead to confusion and clutter.

"A human resource manager helps establish fairness and consistency across the organization," Coffey said. “Employees learn what to expect from hiring policy development, performance management, compensation allocation [and] vacation policies. By not hiring HR managers, companies can increase employee turnover, one of the highest labor costs. This is what happens when dissatisfied employees quit because of inconsistent, time-consuming, and unfair policies.”

Legal and operational consequences

Aside from employee confusion or dissatisfaction, the consequences of faulty logistics when it comes to HR-related tasks are severe. When a business owner is overwhelmed with the responsibilities of running the business and managing human resources, they could find themselves in a records nightmare.

"If a company doesn't hire an HR manager, things get overlooked," Brannon said. "Critical paperwork, completed photo releases that could lead to lawsuits, updating outdated paperwork, tweaking flawed forms, and updating employee tax information are all key items that a business owner with an in-house human resources department might overlook."

These documentation issues can quickly lead to legal issues, potentially leading to fines or imprisonmentComplain. While late paperwork doesn't seem like much of a threat at first glance, it can be a slippery slope, causing extra work at best and legal disaster at worst.

When is it time to hire an HR employee? - businessnewsdaily.com (4)Did you know?Another HR outsourcing option is aProfessional Association of Employers (PEO). PEOs use a co-employment model, which means your employees appear on their books for legal and tax purposes.

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The need for HR in the company

There is no getting around HR. The question is how to maximize efficiency and return on investment. Many entrepreneurs try to manage everything on their own until it is no longer possible. However, when dealing with something as sensitive and critical as HR, it is crucial to establish a planned transition away from the start-up phase, where owners and employees all play a role, to a more specialized organization with dedicated department heads.

If you think about HR early on - and when you should relinquish certain responsibilities - it becomes much easier to hand control over to a dedicated HR manager before things get messy.

Max Freedman contributed to the writing and research of this article. Source interviews were conducted for a previous version of this article.


What are the biggest challenges for HR in 2022? ›

Let's dive into the top 9 HR challenges in 2022 and how your organization can take steps to solve them.
  • Employee engagement. ...
  • Supporting leadership. ...
  • Recruiting and onboarding great talent. ...
  • Retaining employees. ...
  • Employee health and wellness. ...
  • Learning and development. ...
  • Adapting to remote work. ...
  • Diversity, equity, and inclusion.
28 Jun 2022

What should HR focus on in 2022? ›

According to a report by Gardner, developing critical skills and competencies is the top priority for HR managers in 2022. Other HR goals include improving the employee experience and developing a connected workplace culture, regardless of location.

What are the key HR trends for 2022? ›

A recent report by McKinsey states that in 2022, companies will focus on building strong leadership and a sense of trust among the current workforce and potential employees in the job market. Such findings aren't surprising as employees are seeking a reliable and supportive environment during uncertain times.

What trends will shape HR in the next 5 years? ›

Future of HR in 2021. Looking ahead 5 years: Future of HR in 2025.
What are the trends that will change global HR?
  • Remote work practices. ...
  • Data and AI. ...
  • Inclusive culture and gig economy. ...
  • People analytics. ...
  • Employee experience. ...
  • Focus on cybersecurity. ...
  • Work from Home leading to Work From Anywhere. ...
  • Absence of face-time.

What are the 3 biggest issues in HR today? ›

Today's Top 10 Human Resource Management Challenges
Challenges% of Companies
1. Change management48%
2. Leadership development35%
3. HR effectiveness measurement27%
4. Organizational effectiveness25%
6 more rows
6 Sept 2022

What are three trends impacting HR today? ›

Here are 12 of the biggest HR trends in 2022: Adopt Remote Work Policies. Practice Fair Chance Hiring for Those with Criminal Records. Shift Toward a People-First Culture.

What are the hot topics in HR right now? ›

Top 7 HR Trends for 2023
  • Setting the Hybrid Work Model for Collaboration. ...
  • “Human” Leadership. ...
  • Working in the Metaverse. ...
  • Change Management. ...
  • People Analytics. ...
  • The Transition From Employee Well-being To Healthy Organization. ...
  • DEI in the Spotlight.
16 Nov 2022

What employees want most in 2022? ›

A salary that contributes to their financial wellness; a sense of safety and stability; opportunities for learning, growth, and career development. All these things are fundamental in order to build a good workplace that employees will love and want to stay in.

What is a good HR to employee ratio? ›

According to Bloomberg BNA's HR Department Benchmarks and Analysis report, the rule-of-thumb ratio is 1.4 full-time HR staff per 100 employees.

What is the great resignation 2022? ›

The “Great Resignation” that has seen a record number of workers in the United States voluntarily resign from their jobs continued as close to 4.1 million workers quit in September 2022, according to the Job Openings and Labor Turnover Survey (JOLTS) released by the U.S. Department of Labor's Bureau of Labor Statistics ...

How do you attract employees in 2022? ›

5 Innovative Ways to Attract Top Talent for Your Company in 2022
  1. Factors That Will Come into Play When Hiring New Talent.
  2. Give Workplace Flexibility.
  3. Present a Positive Company Culture.
  4. Create an Accurate and Authentic Employer Brand.
  5. Increase Your Emphasis on DEI.
  6. Increase the Pay Rate.
  7. Future of Recruiting Practices.

What recruitment looks like in 2022? ›

Another significant recruitment trend for 2022 will be to invest in hiring technologies to remove bias, create equitable recruitment practices, and ensure a culture fit. Recruiters are now recognising the flexibility of workplace assessment tools such as aptitude tests and DISC profiles.

Will HR become obsolete? ›

HR's role in business may become obsolete in the future – but focusing on today, we need to push past the 'same old' practices, roll up our sleeves, and encourage organisations to make deeper, more meaningful changes.

What should HR be focusing on in 2023? ›

HR Trends like DEI, hybrid and remote work, employee skills management, employee benefits, company culture, engagement, technology, quiet quitting and focus on retention may represent significant challenges for HR professionals in 2023.

Is HR a respected career? ›

To conclude, human resources is a highly prospective career path with immense potential for advancement, learning, and growth. If enhancing employee dynamics, shaping an organization's culture, or implementing workplace policies entices you, human resources is an ideal career choice.

What are common HR mistakes? ›

Here are 10 of the most common HR mistakes, not in any particular order!
  • Not Having an Up-to-Date and Compliant Handbook. ...
  • Lack of Documentation on Terminations. ...
  • Inconsistent and Insufficient Employee Files and Records. ...
  • Lack of Supervisor/Manager Training. ...
  • Poor Hiring Practices. ...
  • Misclassification of Employees.
7 Mar 2022

What are the 7 major HR activities? ›

On this page, you'll find the main functions of an HR department, and what each entails:
  • Recruitment and Hiring.
  • Training and Development.
  • Employer-Employee Relations.
  • Maintain Company Culture.
  • Manage Employee Benefits.
  • Create a Safe Work Environment.
  • Handle Disciplinary Actions.

What are the most critical challenges facing HR professional today? ›

HR deals with many issues, but probably the biggest challenges facing HR Departments today are Recruitment, Retention & Motivation, Leadership Development and Corporate Culture. As HR works to move to a more strategic role, addressing these issues has become a continual and time-consuming process. Here's why.

What are the 3 HR approaches? ›

The three phases of human resources management are acquisition, development and termination. These phases are also known as the pre-hiring phase, the training phase, and the post-hiring phase.

What factors are driving the top 5 priorities for HR in 2022? ›

We surveyed more than 500 HR leaders across all major industries to assess their priorities and expected challenges in 2022. Building critical skills and competencies tops the list, but many HR leaders will also prioritize change management, leadership, and diversity, equity and inclusion (DEI) initiatives.

What are the 5 main areas of HR? ›

Human Resources manages 5 main duties: talent management, compensation and employee benefits, training and development, compliance, and workplace safety.

What is the most demanded job in the HR field? ›

The Most In-Demand Jobs in the HR Department
  1. Recruiting Coordinator. Average Years of Experience: 1 - 3 years. ...
  2. HR Assistant. Average Years of Experience: 2 years. ...
  3. HR Coordinator. Average Years of Experience: 2 - 3 years. ...
  4. HR Specialist. Average Years of Experience: 3 years. ...
  5. HR Generalist. ...
  6. HR Manager. ...
  7. Recruiting Manager. ...
  8. HR Director.
12 Feb 2019

Which are most popularly used HR phrases? ›

The most commonly said phrases by a HR practitioner (and what we really mean…)
  • It depends… ...
  • It's whatever is reasonable for you. ...
  • We need to follow policies and procedures. ...
  • Well we are where we are now… ...
  • Don't worry we've heard it before. ...
  • There's no right or wrong. ...
  • There are a number of risks to consider.
27 Mar 2019

What is the average time to hire in 2022? ›

The average length of the hiring process is 36 days. 65% of companies communicate the importance of a mobile assignment to an employee's career. On average, 55% of the candidates believe it should take less than two weeks from the first interview to a job offer.

Why is hiring 2022 so hard? ›

According to the iCIMS 2022 Workforce Report, more than 90% of business leaders said their organization would not meet goals without the right talent. Leaders cited hiring or retaining talent as the biggest HR challenge in 2022. The reason for this is simple- candidates hold all of the cards in today's job market.

What month do companies hire the most? ›

However, January and February are the most popular hiring months. Avoid the summer and holiday season when looking for a new job, since most companies slow down during these periods. The best time to look for a job is toward the beginning of the workweek and late mornings. This is when most companies update job boards.

How many employees do you need to have an HR department? ›

There's no “rule” stating that a small business must have an HR team or manager in charge of human resources activities. But, most experts recommend bringing on a full-time human resource staff member when there are at least 10 employees within the company.

Can HR be friends with employees? ›

HR is not your friend. They aren't as well-acquainted with the company and work in the management's best interests. With such inhibitions in mind for Human resource professionals, it is a challenging factor for them to create good and cordial relationships with their employees.

Why are people quiet quitting? ›

Pew Research found that the main reasons for quitting in 2021 included: low pay, lack of opportunities for advancement, feeling disrespected at work, childcare issues, lack of flexible hours and not having good benefits.

What is the new quiet quitting? ›

Many managers are aware of the phenomenon dubbed "quiet quitting" — exhausted, burnt out workers performing at the minimum standard. However, a new analysis from LinkedIn suggests that rather than quitting quietly, more people are just quitting.

What is quiet quitter? ›

Key Takeaways. The term “quiet quitting” refers to employees who put no more effort into their jobs than absolutely necessary. A 2022 Gallup survey suggested that at least half of the U.S. workforce consists of quiet quitters.

Why is recruiting so hard right now? ›

Employee turnover is another major reason why hiring is so hard right now. According to ADP Research Institute's People at Work 2022: A Global Workforce View, 7 in 10 workers have considered a major career change this year.

How can HR attract employees? ›

5 Powerful Strategies to Attract the Best Employees
  1. Develop a candidate persona.
  2. Create an employee referral program.
  3. Attract the best employees through improved employer branding.
  4. Expand your outreach strategies.
  5. Take advantage of recruitment automation.
13 Jul 2022

What new employees are looking for? ›

A recent study found that employees showed a 56 percent increase in job performance when they felt a sense of belonging at work.
Recognition and appreciation
  • Tenure milestones.
  • Meeting or surpassing quantitative company goals.
  • Promotions.
  • Effort-based recognition.
  • Recognition for enacting desired company values.
25 Jul 2022

What is one of the most challenging issue for hiring in 2022? ›

A recent survey conducted by Ogletree Deakins indicates what is probably no surprise to many employers — hiring and retention represent the biggest challenge employers currently face. While background checks won't necessarily make your employees more satisfied, they can make you more satisfied with your employees.

What is the future of HR recruiter? ›

The future of recruiting will include Automation, strategic planning, and better integration with company objectives. Companies now need to focus intensely on a recruiter's skills to manage and execute recruitment in a future market.

What are the major challenges facing HR in the near future? ›

Retaining and rewarding the best employees

A staggering 60% of those who responded to the Challenges Facing HR Over the Next 10 Years survey said retaining and rewarding the best employees would be the top challenge. The way to achieve a promotion within organisations is changing.

What are the top HR strategic challenges for 2022 and beyond? ›

Employee Health and Well-Being

Employee well-being remains among the top HR issues in 2022. After the major disruptions of 2020, employers began to recognize the need for customized benefit plans to address individual employees' most pressing issues.

What are the major challenges faced by HR? ›

HR deals with many issues, but probably the biggest challenges facing HR Departments today are Recruitment, Retention & Motivation, Leadership Development and Corporate Culture. As HR works to move to a more strategic role, addressing these issues has become a continual and time-consuming process.

What is the biggest HR challenge in recruitment? ›

It is a challenge for the HR Team to keep track of documents when there is an influx of resumes and applications for open positions, especially when each job posting receives an average of 250 resumes. Hiring team needs to collaborate both within the team and with candidates to quickly select the best hires.

What are the major mistakes to be avoided by the HR? ›

Here are 10 of the most common HR mistakes, not in any particular order!
  • Not Having an Up-to-Date and Compliant Handbook. ...
  • Lack of Documentation on Terminations. ...
  • Inconsistent and Insufficient Employee Files and Records. ...
  • Lack of Supervisor/Manager Training. ...
  • Poor Hiring Practices. ...
  • Misclassification of Employees.
7 Mar 2022

What are the 2 elements of HR strategy? ›

5 Pillars of a Successful HR Strategy
  • Legal requirements. ...
  • Employee engagement. ...
  • Career advancement programs. ...
  • Corporate image. ...
  • Performance management system. ...
  • Be a modern HR professional.

What are the 5 major activities that the HR department is doing? ›

Human Resources manages 5 main duties: talent management, compensation and employee benefits, training and development, compliance, and workplace safety. An HR department can help provide organizational structure and the ability to meet business needs by effectively managing the employee lifecycle.

Why is recruiting so hard 2022? ›

Recruitment Challenges in Early 2022

The primary factors that made recruiting challenges in early 2022 were difficulty securing picky talent and recovering the workforce for many companies that had been understaffed.

What are the five most important HR policies? ›

In this blog, we discuss the 10 top HR policies in India that every company should consider.
  • Employment contract. ...
  • Employee wages. ...
  • Code of Conduct. ...
  • Leave policy. ...
  • Employee provident fund. ...
  • Gratuity Policy. ...
  • Paternity and maternity leave policy. ...
  • Sexual harassment workplace policy.

What are the 6 challenges of human resource management? ›

Top 6 Challenges in HRM You Should Know
  • 1.Change Management:-
  • Staff Training and Development:–
  • Attracting Top Talent:-
  • Talent Retention:-
  • Ensuring Employees' Physical and Mental Well Being:-
  • Ensuring Diversity and Inclusion:-
12 Oct 2022

What is the best leadership style for human resources? ›

The charismatic leadership model for HR is one of the most effective leadership styles, but it doesn't work for every organization. It is a leadership style that focuses on employee engagement, happiness, and enthusiasm within your teams.


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