Does Your Company Need an HR Department?

Posted January 7, 2014 | By csponline

Human resources is a common department in large corporations; however, the small business owner rarely sees the immediate value of staffing a human resource generalist. In many cases, the small business owner takes on much of the human resource-related tasks themselves or delegates them to another non-departmental employee such as the accountant or administrative assistant. Some business owners will even outsource various human resource functions to outside vendors such as an insurance broker and payroll specialist. While these services often come with a hefty retainer fee, they limit the time business owners or other employees have to spend on human resource-related tasks and often come in at a far less cost than staffing a new employee.

However, as small companies grow into large ones, managing human resource-related functions takes on new life. Here are some things to consider when your company is on the verge of hiring human resource staff.

Businesswomen shaking hands

Knowing When to Take the HR Plunge

Small business owners often handle internal business operations themselves as part of cost-saving measures designed to keep the business running lean. From cleaning up around the office and answering the company phone line to basic accounting and IT services, small business owners wear a lot of different hats to save money. Human resource-related job functions often fall under that DIY umbrella for many small businesses. Owners will take on tasks like payroll, benefit management, hiring, training and more in lieu of hiring a human resource generalist; however, as you take on more and more job responsibilities, other business-related processes and duties can suffer.

It is at that point that you should consider what your time is worth as a business owner, and, if you are delegating the tasks to other team members, what their time is worth to the business. These unrelated tasks can add up and take valuable time away from the actual productivity and profitability of your business. If you start to see a notable dip in your productivity level or other employees aren’t able to keep up with the extra demands on time because of HR-related job duties, it is probably time to consider hiring a human resource generalist.

Hiring a human resource generalist is also about employee numbers. As your business grows in services and in numbers, the need for an HR department will grow concurrently. Generally, industry reports recommend hiring a full-time human resource staff member at around 40 employees. For smaller workforces, you might consider transitioning a current employee into a full-time role as your business’ human resource professional by offsetting tuition costs of a human resource degree online program. Doing so will save you time and money on training someone in the processes of your business while providing an excellent career opportunity for a current staff member.

Designing the HR Generalist Position

Human resources serve an internal function for a company by helping to support positive relationships with your workforce. There are many different roles that a human resource professional can serve from a narrow, specialized focus to a more general HR approach. Before you take the hiring plunge, it is important to have a clear understanding of how you wish to utilize human resources in your company and how you will structure the HR role, including its day-to-day job responsibilities, the organizational hierarchy and what value they will add to your business.

The biggest questions when initially structuring your HR role is whether to focus on more administrative duties or specialized human resource services. Smaller companies with level growth will likely benefit from a human resource professional who is capable of serving in varied HR roles—otherwise known as a generalist. Businesses in a rapidly growing field with the need to hire and train new talent quickly will need an HR professional trained in recruitment and retention processes. Larger companies with robust benefit packages may consider hiring an HR professional with experience in compensation and benefit programs. It is important for you to come into the hiring process with a firm understanding of your business’ HR needs.

There is a range of general human resource tasks for any one employee to handle, including recruitment and retention efforts, training and professional development, payroll and benefits, company policy and procedure management, and more. Approach the hiring process for your HR professional with an understanding of the intrinsic value of a staff member focused on employees. Doing so can help raise employee satisfaction, productivity and profits across the board.


Also published on Medium.