Outsourced HR

How big does your organisation need to be before you employ HR?


How big does your organisation need to be before you employ HR? Is it just for larger organisations or can everyone benefit from having HR expertise? The attached article suggests that organisations typically have 150 employees before they employ a dedicated HR team. However, it also says that once you get past 50 employees, you need to be preparing strong HR processes. Why?

"Most new startups don't have a designated HR Manager, and most CEO's lack the proper HR training. Instead, they rely on the company's grandiose vision or the founder's social skills to compensate for the lack of basic procedures. That typically works well for the first few months, and then the dust begins to settle, and operational holes become evident."
Employee Relations, Discipline, Grievance, TUPE, Redundancy, Absence, Performance
Marc Andreasson

The article is based on technology companies in Silicon Valley and therefore applies more to US organisations but does the same theory apply to UK organisations as well? In this article, we look at the mandatory obligations, the best practice suggestions and also the HR issues that all growing UK based organisations should seriously consider.

What is mandatory for all organisations in the UK?

There are surprisingly few mandatory requirements in the UK.

Best practice for all organisations

Other policies aren’t mandatory but are advisable to have as there are minimum legal requirements that you are obliged to follow.

  • A Sickness Absence policy should be in place to show that you comply with the requirement to pay Statutory Sick Pay. It is also advisable that you tell your employees how they will be treated before you have an issue rather than risk making up a response after the event.
  • A Family Friendly policy (whether as a whole or in constituent parts) informs your employees how you will manage Maternity, Paternity, Parental and Adoption leave situations.
  • A Flexible working policy will demonstrate that you will consider all flexible working requests.

Communicate and stick to the policy!

When your policies are drafted, two things are critical; that you both communicate them to your employees and that you stick to them! Having a set of policies in a drawer or on an intranet is pointless unless you are willing to do something with them. You will also need to ensure they are regularly reviewed to reflect changing employment legislation.

What issues should growing businesses consider?

Once you’ve got the basics in place, a growing business needs expert HR advice to ensure that the business continues to recruit, develop and retain the employees that they need to continue growing. Without HR in place, managers may lack the expertise to recruit the talent that they need. The managers themselves may have been promoted on the basis of their technical excellence and not necessarily because they have the skills to manage people. Without development, management may not have the ability to motivate their teams and employee issues may be left unresolved, reducing productivity and increasing attrition.

These issues, and many others can start to develop well before the organisation employs 50 people, nevermind 150. So what can organisations do to prevent this? Often a great, cost effective way to gain skills without incurring the cost of an employee is by engaging an HR Consultant. By doing this, you can get access to a diverse range of skills. 

So in answer to the question, how big does your organisation need to be before you employ HR? The answer is businesses of all size can benefit from accessing HR expertise, the only question is how will you access it?

Interested in finding out more? Why not give Cornerstone Resources a call on 07908 875146 or email us by clicking the button below!
