Is your company ready for a full-time HR person? This is a question that plagues many a growing company.

It starts out easy.  The owner / visionary has an idea and they go into business. The business begins to grow and they hire their first employee. Then a second, and a third, and before you know it, there are 77 people working there. The third employee that was hired is a great administrative employee, so the bulk of the hiring/firing and employee relations has just somehow ended up in their job description, but they aren’t really an HR person.

Or, we have a smaller company of around 22 employees.  There is an Office Manager, who also handles HR, payroll and IT. They know enough about all of these areas to get the job done but may not have formal training in any of these areas.

Or, sometimes, we have a micro-business with 6 employees. The owner or one of the 6 usually handles any necessary HR functions, but they also have other duties to perform.

So – when do you need a full-time, dedicated HR person?

Historically, the rule of thumb has been a ratio of one HR person for every 100 employees. The problem with that philosophy is, each company is different, and the amount of work it takes to manage HR within a company depends more on the company structure, automation of HR processes, and overall knowledge and sophistication of employees than it does on a specific employee headcount.

If, for example, the company has 56 employees, an above average turnover rate, with no structure or people assigned responsibility to handle performance reviews, disciplinary actions, benefits, employee relations and payroll — you might need a full-time HR person.

Here are some signs you might need a full-time HR person:

1. You, as an owner, are spending more of your time dealing with employee issues than growing your business.
2. Your Controller / Office Manager / Bookkeeper is having trouble meeting deadlines on their usual work because of employee issues.
3. The company has 50 or more employees.  This requires compliance with many important laws that are associated with disabilities, leaves of absence, benefits, and PTO.
4. Employees are starting to get vocal about lawsuits / complaints.
5. Complaints have been filed and/or fines have been assessed.

It is also important to remember that HR isn’t just a person.  HR is a presence. Whether you have 10 employees or 10,000 employees, your culture, structure, and rules of engagement should be known to all.  That’s what HR is. A marriage of compliance, operations, and culture, which combine to drive performance to ensure profits and a sustainable business.

If you’re not sure if it’s time for your business to hire a full-time HR person, NAE can help. We can provide a company or departmental needs analysis to help you determine what you need.  Please contact us to find out more.