Startup Tips: When Should I Hire Someone in HR?
Popular opinion will suggest hiring someone in HR around employee number 10 – 15, yet others suggest to wait until there are hundreds of employees. The answer likely lies somewhere in the middle for your startup.
Here’s my take on the key pros and cons to evaluate:
Pro: Help with legal guidance. Note that I said guidance. If you have a legal issue, a lawyer is still your best bet. That being said, an HR manager can guide you in the right direction. Here in Ontario employer/employee interactions are guided by the ESA (Employment Standards Act). Once you get to around 10 employees you will start having to deal with questions about overtime, breaks, paternity leave, health leave and so on. The ESA website is great, but you will still need to invest a lot of time reading the site. Having an HR employee will offload that from one of the founders so they can focus on building their business.
Con: Management offloads some of their work (and learnings). If you hire an HR manager too early you may end up losing touch with your company culture and learning about how to deal with people. There were a lot of tough employee situations I had to deal with that I would have loved to offload to an HR manager at the time. However, looking back, I feel that not having an HR manager forced me to learn a lot about working with employees directly to resolve issues.
Pro: Recruiting help when you are trying to grow. If you are trying to grow your team quickly you only have a few options: hiring someone in HR, using a recruiter and/or adopting technology. Ideally, you will be able to employ a combination of these resources. Hiring technology such as Ideal Candidate does not replace recruiters but rather aids them by freeing up their time to devote to high quality applicants. The combination of great technology and a great HR employee can save you a TON of money in recruiting costs.
Con: Adding in too much process. As your business grows having process can help, but with a smaller team, it can get in the way. HR will add formalities around things such as performance reviews, vacation time tracking and more. Process helps keep larger business on track but early on, having less process can help with speed and creativity.
Deciding when to hire someone in HR is not a simple question to answer. For us, the tipping point was 35 employees and I was extremely happy to have an HR manager when we did. While there is no magic formula, I can confidently say that organizations willing to utilize hiring technology benefit from the ability to put their first HR professional to best use.
What was your hiring tipping point? Do you wish you had an HR professional earlier?
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