(6-8 minute read)
Think of all the responsibilities that fall under the Human Resources umbrella—from compensation to benefits, job safety to compliance, employee satisfaction to birthday celebrations and much more. As your company grows, those responsibilities will expand and you’ll need to be prepared to staff the department accordingly. The key is to organize the unit so it’s efficient but not excessive.
Usually, an HR department grows from one person who was hired early on in the business start-up phase. Working closely with the owner or CEO, the first HR employee helps to design the future of the company. He or she understands the vision of the owner and plans the workforce to make that vision happen. This involves establishing all of the processes and procedures under the Human Resources umbrella—compensation, payroll processing, benefits, recruiting, employee relations, training and development, safety compliance, planning, discipline, job descriptions, employment law, and more.
Sometimes a business owner or CEO will retain final HR decision making, so hiring a management level person might be sufficient. Other businesses may start with a director level person. This decision will depend on several factors, including the involvement the owner or CEO wants to have in HR matters, how the company decides to utilize outside help such as recruiters, staffing agencies, or a co-employment provider, and the salary budget for a director versus a manager.
Whether you start with an HR director or manager, once headcount starts to increase, that person will need to focus more on strategy. At this point, you’ll need to hire an HR generalist or HR assistant to take over the many administrative functions. Thereafter, the next step in the department’s growth will be another leader. For example, the director can work with the executive team to strategize the growth of the workforce so it aligns with the expansion of the business while a manager can institute the decisions made. A Human Resources Information System (HRIS) should be added by this point for effective organization of the details and data of a growing workforce.
With this foundational team of three in a small to midsized company, each HR person will work across most of the function categories but at different levels. The director will focus on strategy and planning, the manager on the establishment and maintenance of each function, and the generalist or assistant to keep up with the administrative details of it all.
Beyond that base model of three people, HR can grow further as the headcount (and workload) expands. Staffing, recruiting, and administrative services can be outsourced or brought in-house. Sub-departments can be established, such as Compensation and Benefits, Job Safety and Compliance, Training and Development, Recruiting and Onboarding, and as growth continues, each of these can be split to be even more specific.
The headcount for each of these departments will vary by industry and situation. For example, a worksite that has manufacturing and/or a warehouse will need more emphasis on job safety and related training and compliance. A company with low turnover will have less need for a dedicated recruiting team.
The development of an HR department provides a strong core to any company, but like any department it will need to grow or be outsourced in step with the business. If you start with the firm foundation of a director or manager who is experienced and knowledgeable across all HR functions, you can build from there as needed. But remember, to be effective, the HR team will have to grow in such a way that it’s always striving to meet the career, safety, and compensatory needs of the employees, while contributing to the success, protection, and profitability of the company.
To take a deeper dive into HR functions, clarity of roles and the appropriate time to consider outsourcing, get in touch with us today.
July 12, 2018
> 50 employees < 50 employees Article Business Executives Business Owners Cost Human Resources