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.

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.

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?

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?" ?

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.”

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.

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.

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.

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.

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.