When was the last time you heard the boss of a start-up say, “my first hire was an HR pro”? Chances are never.
And that makes sense. When budgets are tight, you’re the one choosing who you want to work for you, and the paperwork doesn’t take up too much time, that’s one investment it makes sense to delay.
Every business needs to deal with critical HR processes, whether you’re a company of 5 or 5000 employees. But it’s unlikely you’ll have a person on board from the very beginning, so at what point do you bring a practitioner in-house? Initially, it makes sense for business owners to take on the people-related tasks themselves. It might mean a few late nights in the office, but when the budget is tight, avoiding unnecessary costs where you can is key. And after all, the fewer the employees, the more manageable it is.
But there comes the point when this no longer makes business sense, and having a dedicated HR person is necessary. A well-functioning team will ensure legal compliance, take control of payroll, onboard new hires properly, hire the right people, and keep employees happy. Through the use of Human Resources management systems such as Cesanne, HR can help business owners who simply can’t manage all of this effectively whilst running the rest of the organization.
So how do you know it’s the right time to bring HR in-house? Of course, it will largely depend on the industry, workload, and company’s budget, but there are also a few common signs which indicate it’s time to shift your people’s responsibilities into better hands.
1. You’ve plans to keep growing
Company growth is exciting, but it’s not without its struggles. For one, recruitment can be extremely time-consuming – writing job descriptions, finding candidates, endlessly sifting through CVs, interviewing, making sure you’re legally compliant – it’s a lot to take on whilst juggling other responsibilities. So, if you have plans for further growth, hiring a dedicated person to facilitate these processes is a smart move and will free up your time to deal with other pressing tasks.
What’s more, HR people often are experienced interviewers, and so will help ensure you’re hiring right. Having someone on board who has a knack for spotting a candidate’s strengths, weaknesses or red flags that you or others might miss is valuable, so when discussing growth strategy, make sure bringing on board an in-house HR professional is part of your plans.
2. There’s a lack of knowledge
How confident are you with compliance? Do you have a good understanding of employment law, or are you constantly checking Google for best HR practice? You might have enough knowledge of HR to get-by at the beginning, but as you grow, you’ll find that things start getting more complicated, and expert intervention is required. When you start feeling out of your depth, it’s time to look for someone with more experience and knowledge, and you’ll reduce financial or legal risk down the line.
3. You’re not finding the time
Because your number one priority is to focus on growing the business and running day-to-day operations, it’s easy for HR responsibilities to fall by the way-side. However, seeing that a company’s most valuable asset is its people, HR tasks need to be given the attention they deserve. But when they are overwhelming your schedule, and if the benefits of focusing your time elsewhere outweigh cost-saving, bringing in a person to reduce the burden should be a no-brainer.
4. Too many staff are leaving too quickly
High staff churn is expensive and highly disruptive – neither of which your business can afford. While you may have a pretty good idea of what’s at the root of the problem, chances are you are too busy firefighting and interviewing for replacements to fix it. Bringing in an experienced professional not only buys you more time but can help you dig down into the detail, confirm your hunches, and put in place appropriate strategies to hang on to your essential resource – the people that will make your business successful.
Should you look externally instead?
Recognize these issues, but not convinced you can justify the extra headcount yet?
HR outsourcing is on the rise. Modern systems have allowed organizations to combine their in-house HR functions with external expertise around a shared Cloud technology platform, meaning HROs have become a more attractive option for businesses. Companies in the 0-50 employee bracket benefit from outsourcing, especially. Maybe you can’t justify hiring a person full-time like the bigger companies can, but you still need help lightening the administrative burden that HR brings. You also may not have the budget for sophisticated technology just yet – but external agencies will provide this with their service.
Larger companies shouldn’t rule out HROs, though. Those with 50+ employees would be expected to have their person in-house, but if you want that person to focus more on strategy and employee engagement, having an HRO to process the more administrative tasks (payroll, absences, etc.) will help free up their time.