When is the Right Time to Add an HR Department

In the beginning, most entrepreneurs tend to handle many different roles. But there are times when they need to step back and realise that they may be inadvertently hurting their business and employees.

Even if the organisation does not have many employees, human resource tasks such as hiring, recordkeeping and benefits administration are never ending. A company could suffer if there is no HR specialist that could give a company the attention and time it needs.

At what point does a company need the help of HR? Here are 4 signs that it’s time to add an HR department.

HR tech tools are not enough

Nowadays, there are many HR tech tools on the market. Though these tools are very helpful in running a business, they cannot replace people. HR tech tools can help with everything from recruitment to payroll, but people failed to understand that it apps cannot replace a whole department.

Instead, HR tech tools are facilitating the transition of HR from an administrative role to a more strategic role within the organisation. By hiring your own HR team early, you will allow your company to focus on hiring the right people, therefore creating a better employee experience and maintaining a positive company culture.

By taking a look at the HR tech tools you’re already using to help with your business, you can gather feedback from employees or use analytics to see what’s still needed in your employee experience and workplace culture.

Employees are not proactive

In startups, companies usually don’t have an employee covering HR duties full time. It’s only when a problem arises do people react by stepping into the role. This leaves holes in the system.

Companies get into trouble when the person handling HR is reactive instead of proactive. The problem with being reactive is when required policies, employee records or other compliance issues have gaps.

The HR department has many tasks and responsibilities

HR supports an organisation’s goals by making sure the right programs and policies are in place to attract, retain, engage and motivate employees therefore creating a high-performing organisation.

If employers want to know if their current HR practices are reactive or proactive, they can start by assessing the most recent HR incidents, policy changes or transitions: Were they built around benefits, compensation, employee relations and performance management? Or were they created in reaction to events that interrupted normal company procedures?

Someone without HR experience shouldn’t be in charge of HR

HR professionals carry a lot of weight and skill. Therefore, someone without HR experience should not handle the role of HR. For example, someone without HR experience is tasked to keep the budget low, but without HR experience they overlooked the potential costs and legal ramifications.

Whether a company has eight or 800 workers, managing the compliance and legal aspects of the job cannot be overlooked. If the employee running between multiple jobs has no experience in HR practices, they will not be able to handle HR.

Hire someone with the ability to mitigate risks for employees and ensure the organisation does not run into any problems.

It can be very expensive when no one’s doing HR

CEOs can face expensive legal risks when they cut HR-related costs. The hiring, firing, promoting and demoting decisions can have significant consequences under the law. The more employees one has, the more decisions one has to make, thus the greater the risk of a problem.

It's important to find an HR specialist that suits your needs.

Companies can look into HR companies that offers HR solutions to fit their needs and solve their problems. If you feel more comfortable with in an house team member, you can start by consulting with mentors and business leaders to discuss what qualities their HR specialists possess that you need, as well.

This will help you feel comfortable about what qualities you’re looking for when you’re going to set up your first HR department.

This article is adapted from How to Know It's Time to Add an HR Department by Heather R. Huhman

Need to hire HR staff? Find them all at AJobThing.com where thousands of HR candidates are waiting to apply to your vacancies.