Growth is great, but along with it comes challenges. Many organizations find themselves having to decide when to outsource human resources functions to a consultant, or how to create a dedicated department for organizational support.
As a small business owner you most likely had to handle all HR functions to manage costs, and then later realized that you were spending a lot of your time navigating uncharted waters when the number of employees increased and issues became more frequent and complex.
Besides, in order to grow your business you need to focus on what you do best and then surround yourself with the right team of experts to handle the rest.
What is the right solution?
Deciding what type of solution is right for your company is a big decision, and one that has no one-size-fits-all answer.
Expert opinion varies on how large your business should be before hiring an HR professional.
Some industry reports recommend hiring a full-time, professionally-trained human resources staff member at around 50 employees, while others in the field say 100.
I’ve worked in both small businesses and large corporations as a consultant, so I’m not here to tell you that you should do one or the other if you have X number of employees.
But I do think that you need to bring some sort of human resources professional onboard as soon as you hire your first employee so that you build a solid business foundation and avoid making costly mistakes. You can read my reasons why here.
The Cost of Hiring an HR Professional vs. an Employee
Like all pros, HR consultants charge different amounts for their services, depending on experience, skills, location, size of the company and your specific needs.
Your cost will also vary on whether you hire them on a retainer basis so they are always available to you, or if you want them to get you set up with everything you need and then train someone on your team to manage the day-to-day personnel activities.
If you decide an HR department is the best option, you will be required to put them on your payroll and benefits and manage their time.
If you have a bigger company that will benefit from an in-house person or people, and the resources to do so, this might be a good choice for you.
In that case, I encourage you to hire someone with the breadth of HR knowledge and experience who not only understands employment laws and regulations but also knows how to strategically lead the function.
This person will be your go-to professional and be there to brainstorm ideas with you when it comes to growing your business and maximizing talent.
Commonly, small business owners should expect to pay a junior staffer with an HR college degree an average salary around $48,000-$60,000 (the average salary in the US is $56,641).
If you want someone with more experience and certification —and you should—that number will go up.
Many companies I’ve worked with start thinking about implementing a dedicated HR department once they hit about 50 employees, especially if they foresee the company growing.
The good news is that you don’t have to hire an entire team right away. You can always start with a consultant or one employee and grow from there.
What are the benefits of human resources?
No matter what you decide, here are some of the benefits of having human resources support:
- You’ll spend less time sifting through resumes and interviewing candidates who aren’t qualified. My blog post on hiring the right candidate every time can also help.
- S/He provides a neutral third party for complaints and sensitive issues.
- You will have a bullet-proof handbook along with policies & procedures that protect your business and guide your decisions
- If you do need to fire someone, hiring an HR consultant ensures you’re doing so legally and you won’t get burned later.
- You won’t have to try and figure out paperwork around employee benefits, maternity/paternity leave etc.
- S/He can implement valuable standards and policies to drive your business and keep expectations consistent.
- It can improve company culture, morale, productivity and customer service.
Before you make the decision to hire an HR consultant or an entire department, let’s chat.
From employee benefits to succession planning, I work with small to mid-sized employers with different budgets to improve employee and organizational performance while minimizing employment issues. Contact me today for a free consultation.
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