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When Does My Growing Company Need to Think About HR?

You wouldn’t leave your marketing or sales strategy until years into your company’s growth, so why do so many do the same for HR?

Instead of seeing HR for its strategic importance from day one (engagement, productivity, learning, development) and understanding how these practices impact a company’s bottom line, HR is often viewed (dangerously) as a purely administrative function. Luckily, we’re in the middle of a shift about how companies think about HR—what it is, how it’s managed, and how valuable it is.

As a leader, it’s important that you are deliberate about how you manage and think about your HR—from core HR tasks like benefits and payroll to broader initiatives around culture, compensation, diversity, and beyond—the day you hire your first employee.

The Past: Reactive HR

Explains Liz Ryan, CEO and founder, of Human Workplace, the way that growing companies manage HR follows an all-too-common path:

  1. CEOs tackle all things HR, but only the essentials (e.g., benefits, payroll).
  2. When the pressure of managing it all becomes too much, they hire a junior HR person to tackle benefits and HR administrative work.
  3. The company grows, and people problems around recruiting and engagement crop up. Leaders then ask their (overburdened) junior HR manager to develop high-stakes strategies, for the very first time.

While this reactive approach to HR may get the job done, it’s not without tremendous grief and expense—in turnover, in ill-considered HR systems, and in lost productivity.

The Future: Proactive HR

Your thinking about HR and its growth should begin immediately and develop with you. While the way that your individual company thinks about HR will be unique, here’s a simple strategy to be more proactive.

From day one: Set up a scalable HR system

Tools can run your payroll, fill compliance reports, and automate onboarding, all tasks that traditionally required a dedicated team. Putting together a comprehensive people ops tech stack that accounts for both core HR tasks and peripheral team-related tactics, makes for a better day one strategy for tackling your HR headaches.

At the tipping point: Hire your first HR generalist

What classifies as “the tipping point” will vary by company. Some will choose to hire HR from day one. If you choose not to, the tipping point is where you no longer feel able to dedicate adequate time to (or lack the expertise for) strategic HR.

When this happens, it’s time to hire someone to take it on. Instead of making an administrative HR hire, however, as most people do when they reach this point, bring on someone strategic. This person should tackle HR strategies and tasks like:

As you grow: Begin hiring HR specialists

As with any other department in your company, at some point you’ll need to start hiring specialists. The scalable HR platform that you implemented on day one should serve you through this phase. Your HR specialists should be experts at what they do, and can fill strategic functions including (but not limited to):

Build a better foundation for growth

So, when does your company need HR? At the outset. As a leader, it’s essential to establish a firm foundation for your people to not only ensure that you’re processing paychecks and benefits, but also developing an engaged team.

Get answers to more tough questions like these in The Executive Guide to Growing Your Business.


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