When does a growing company need HR?

The right people strategy can help your business grow — and keep it growing.

For many growing businesses, HR isn't the first thing on the list.

When you're focused on customers, revenue, operations and growth, it can be easy to think, "We'll deal with HR when we get bigger."

But here's the reality: your people strategy needs to grow along with your business.

The question isn't necessarily, "When do we need an HR department?" A better question is:

"When does our business need more intentional HR support?"

The Signs Are Usually There

There isn't a magic employee number that tells you it's time to invest in HR. A company with 50 employees may have more HR complexity than a company with 100.

However, there are some common signs.

1. Managers Are Spending Too Much Time Dealing With People Issues

If managers are constantly handling performance problems, employee questions, workplace concerns or attendance issues without guidance, they're spending time on HR issues instead of leading their teams.

2. You're Making People Decisions Reactively

If policies, performance expectations, compensation decisions and employee development are handled differently from one department to another, your organization may be outgrowing its informal approach.

3. You're Struggling to Retain Good Employees

Turnover isn't always a compensation problem.

Employees leave because of ineffective managers, unclear expectations, lack of development, inconsistent communication and limited opportunities to grow.

A strong HR function can help identify what's really happening.

4. Your Leaders Are Becoming Managers Faster Than They're Developing Leadership Skills

Growth often means promoting successful employees into management positions.

Being a great individual contributor doesn't automatically make someone a great leader.

Managers need support and development to learn how to give feedback, manage performance, communicate effectively and build strong teams.

5. You're Growing Faster Than Your Processes

Hiring more people without improving your HR infrastructure can create problems later.

You may need more structure around performance management, talent management, compensation, policies, leadership development and workforce planning.

HR Doesn't Have to Mean Hiring a Large HR Department

For many small and mid-sized companies, the answer isn't immediately adding a full-time HR team.

A fractional HR leader can provide experienced HR leadership on a flexible basis—giving the business access to strategic expertise without the cost of building a large internal department.

The goal isn't to add bureaucracy.

The goal is to make sure your people practices support your business instead of holding it back.

The Bottom Line

If your company is growing, your people challenges will grow with it.

Waiting until an HR problem becomes a crisis can be expensive and disruptive. Getting the right HR structure and leadership in place earlier can help your business build a stronger foundation for growth.

HR isn't just about managing problems. It's about helping businesses build the people, leaders and processes they need to succeed.

Disclaimer: The information and opinions expressed in this blog are for general informational and educational purposes only and represent the personal opinions and perspectives of KSL HR Consulting. They are not intended to constitute legal, tax, financial, or other professional advice, and they do not create an attorney-client or other professional relationship. Employment laws and regulations vary by jurisdiction and individual circumstances. Readers should consult with qualified legal or other appropriate professionals for advice specific to their situation. KSL HR Consulting makes no guarantees regarding the outcome of any action taken based on the information provided in this blog.