When Should a Small Business Hire HR?
When should a small business hire HR? It is a question many business owners ask as their team grows. You may have started with just a handful of employees and managed everything yourself, but as your workforce increases, HR responsibilities can quickly become more complicated and time-consuming.
There is no specific number of employees at which every business needs HR support. For some businesses, external HR support can be valuable from the very beginning. For others, the need becomes more obvious when the business reaches around 10, 20 or 30 employees.
The important question is not simply "How many employees do I have?" but "Do I have the time, knowledge and systems to manage my people effectively and compliantly?"
At Evaluate HR, we provide flexible HR support for small and growing businesses, giving you access to experienced HR professionals without the cost of employing a full-time in-house HR team.
7 Signs Your Small Business Is Ready for HR Support
You may benefit from professional HR support if any of the following sound familiar:
1. You're spending too much time dealing with HR
As your business grows, so does the amount of HR administration. Contracts, policies, holiday records, sickness absence, employee records, onboarding, payroll information and employee queries can all take time away from running your business.
If HR administration is regularly appearing on your to-do list, it may be time to consider outsourcing some or all of it. HR support can give you your time back, allowing you to focus on customers, sales, operations and growth.
2. You are employing more people
There isn't a magic employee number that means you suddenly need HR. However, as your team grows, the likelihood of needing structured HR processes increases. A business with five employees may be able to manage HR informally. Once you have 10, 20 or 30 employees, it becomes increasingly important to have consistent processes for recruitment, contracts, absence, performance, disciplinary matters, employee records and policies.
Growth is often the point at which informal arrangements start to become difficult to manage.
3. You're unsure whether your employment contracts and policies are up to date
Employment law changes regularly, and businesses need to make sure their documentation keeps pace. Your business should have appropriate employment contracts, policies and procedures that reflect current legislation and how your business operates.
If you're unsure whether your contracts or staff handbook are up to date, an HR professional can review your existing documentation and identify areas that need attention. This can help reduce the risk of problems further down the line.
4. You're dealing with employee problems
Perhaps an employee has raised a grievance, there are concerns about performance, someone is regularly absent, or you need to consider disciplinary action. These situations can be difficult for a small business owner, particularly when you don't have an HR professional to guide you through the process.
Getting HR support doesn't mean handing responsibility for your employees to someone else. It means having an experienced professional available to help you understand the appropriate process and documentation.
5. You are worried about getting something wrong
Employment matters can feel daunting when you're trying to manage them alongside running a business. You may find yourself asking:
Can I legally do this?
What should I put in the employee's contract?
How should I manage a disciplinary issue?
What should I do about long-term absence?
Does my staff handbook cover everything it should?
Am I following the correct process?
What records should I keep?
If you're regularly searching Google for answers to HR questions, that can be a good indication that professional HR support would be useful.
6. Your managers need support
As your business grows, you may start giving management responsibilities to employees who have never managed people before. Being a good employee does not automatically mean someone has the skills or confidence to manage a team. Managers may need support with:
Managing performance
Handling difficult conversations
Absence management
Conduct and disciplinary issues
Employee relationships
Giving feedback
Recruitment and onboarding
Applying company policies consistently
HR support can give managers someone to turn to when they need guidance.
7. You want to grow without HR becoming a problem
The best time to put good HR processes in place is often before you have a serious problem. As your business grows, having appropriate contracts, policies, employee records and HR processes in place can make managing your workforce much easier.
Professional HR support can help you build the foundations you need for sustainable growth.
Do Small Businesses Really Need HR?
Not every small business needs a full-time HR manager.
In fact, for many businesses with fewer than 50 employees, employing a full-time HR professional may not be financially practical or necessary.
That doesn't mean you don't need HR support.
An outsourced HR service can give a small business access to experienced HR professionals when they need them, without the cost of employing a full-time HR department.
You can choose the level of support that makes sense for your business.
For example, you may only need help with HR administration and employment documentation. Alternatively, you may want ongoing HR support, advice and guidance for managers.
How Much Does HR Support Cost for a Small Business?
The cost of HR support depends on the size of your workforce and the level of support you require.
For a small business, outsourcing HR can be considerably more flexible than employing a full-time HR professional.
Instead of paying a salary, pension contributions, employer National Insurance, holiday entitlement, training and other employment costs for an in-house HR employee, you can pay for the HR support your business actually needs.
At Evaluate HR, we offer flexible HR services designed specifically for small and growing businesses.
HR Support for Small Businesses
At Evaluate HR, we work with small and growing businesses that need practical, reliable HR support without the cost of an in-house HR department.
Our services can be tailored around what your business actually needs.
HR Administration
HR Advisory Support
When you have a people issue or are unsure how to approach an HR situation, our experienced team can provide practical guidance and support.
Outsourced HR Team
We can take care of the day-to-day HR administration that can otherwise become a burden for business owners and managers.
This can include employee records, HR documentation, payroll reporting and other ongoing administrative requirements.
For businesses that need more comprehensive support, our outsourced HR team provides an extension of your business's internal team.
You get access to experienced HR professionals without needing to recruit and employ a full-time HR department.
HR Documentation
We can also help with essential HR documentation, including employment contracts, staff handbooks, policies and other HR documents.
Frequently Asked Questions
At what number of employees does a business need HR?
There is no fixed employee number at which a business must hire HR. However, as a business grows, HR responsibilities generally become more complex. Many small businesses start considering external HR support somewhere between 5 and 50 employees.
Should a small business hire an HR manager?
Not necessarily. A small business may not need a full-time HR manager. Outsourcing HR can provide access to experienced HR professionals without the cost and commitment of employing someone internally.
Is outsourced HR cheaper than hiring an HR manager?
For many small businesses, outsourcing can be a more cost-effective option because you pay for the level of HR support you need rather than the full employment cost of an HR manager.
What does an outsourced HR company do?
An outsourced HR provider can support businesses with areas such as HR administration, employment contracts, policies, employee relations, absence management, performance management, recruitment and general HR guidance.
Evaluate HR provides flexible HR support for small and growing businesses. We can support you with HR administration, employment contracts, policies, HR advisory support and outsourced HR services.
How can Evaluate HR help my small business?
Don't Wait Until HR Becomes a Problem
You don't need to wait until you have a serious employee issue before getting HR support.
Putting the right HR processes, documentation and support in place early can give you greater confidence as your business grows.
If you're spending too much time on HR, unsure whether you're doing things correctly or simply want an experienced HR professional on hand when you need them, outsourcing could be the right solution.
Take HR off your to-do list.