People person: when is the right time to hire an HR director?

• Author: Francom, Sarah Ryther
• Position: Focus

As a startup launches off the ground, it's common for the founders to wear multiple hats. Common roles, like human resources, tech support and office administrator, are either overlooked or given to someone as a side project. This strategy isn't necessarily a problem in a company's early days, when cash is tight and the mission is still developing. But when is it time to start hiring an expert to take over these roles?

Knowing when to hire an HR professional can be especially tricky, as at times it may seem as though HR doesn't directly impact the bottom line. But as the company grows, hiring an HR pro can be vital to ensuring the company's long-term success.

EARLY ON

When a business is just getting started, it's probably not in the budget to bring an HR expert onboard--and the good news is that it's not always necessary. But when should a startup begin building its HR department?

While there's no hard-and-fast rule to follow when bringing in an HR director, there are a few general benchmarks to follow. The first is employee numbers. A small company with around 10 employees can most likely manage basic HR tasks--like new-hire paperwork--without hiring professional HR assistance, says Ryan Nelson, Utah president of the Mountain States Employers Council.

"Smaller companies are thinking of what they need to accomplish today. They're pushing paper, checking boxes, managing finite items. They need to ask themselves a practical question: At what point does it become worth it to outsource or hire for that type of admin work?"

For some organizations, the threshold might be 10 employees. For other organizations, it might be 25. It all depends on what the founders can manage, says Nelson.

It also depends on how quickly the company is growing. "If the company is experiencing slow, consistent year-over-year progress, then it makes more sense to work with a consultant or part-time individual," says Nelson.

Elisa Garn, Society for Human Resource Management president, adds that having someone, like an office manager, oversee simple HR duties isn't always a bad idea. "A blended role often works well and isn't a negative until you're expecting someone to be an expert without the training and resources. That's when you should work with a broker or hire [an HR director]," she says.

Nelson and Garn agree that by the time an organization reaches around 25 employees, it's time to get serious about either hiring an HR director or hiring someone to handle basic HR...