One of the most challenging determinations in most small to medium-sized companies as they grow is when to bring on a full-time Human Resources professional. In the early days, most founders have to serve as CEO, CFO, CMO, and usually also need to function as the HR department. With a small staff, everyone becomes a generalist and is required to pick up the slack where possible to keep the company moving forward.
As staffing professionals, we’ve had the opportunity to work with thousands of small and mid-sized Canadian businesses to help them hire the right people to ensure their success. While we pride ourselves in understanding our client’s needs and responding to their concerns, there ultimately comes a time when it becomes necessary to have an internal Human Resource Specialist.
How do you know when the time is right?
As a general rule, we suggest that if you have fifty employees, at least one of those people should be an HR specialist. Of course, that ratio of employees to HR specialists is not an absolute rule. Some companies need to have the HR expertise on staff earlier due to the industry they work in, while other owner-operators can hold off a little longer with a good HR consultant’s help. However, it’s worth noting that once you reach fifty employees, your company moves into a different league with regard to government regulations and having someone in-house who knows the rules can be a big help.
For example, as of January 2016, Ontario businesses with 50 or more employees are required to meet the Employment Standard component of the Accessibility for Ontarians with Disabilities Act or “AODA.” While this entails additional legislative requirements that your company will need to understand, it also means you may have to manage an HR compliance audit in the future. Having a human resources professional on staff who understands the company’s daily operations can go a long way to making this process easier on your entire company.
Adding a Human Resources professional can also be helpful when it comes to developing a great corporate culture. For many small businesses, with only a handful of staff, it can be relatively easy to gel and connect as an office family. However, as the staffing needs expand and team members don’t have as much face-to-face time, silos have an opportunity to form, and miscommunication becomes much more likely.
Further to this, having a dedicated HR staff member ensures a readily available resource who can address employee concerns on a timely basis. Mitigating these issues as early as possible should result in cost and time savings.
Another consideration for bringing on an HR specialist is if your company works with multiple contract or freelance employees. These essential, non-permanent staff can bring considerable value but also tie up a significant number of hours with negotiation and processing. Even small companies that use several of these professionals regularly may benefit from having in-house HR capabilities.
How much Human Resources expertise do we need?
The next question that usually comes up for companies deciding whether or not to hire a Human Resources specialist is gauging the level of experience required to efficiently meet the needs of the role. The answer can be tricky, depending on your company’s size, how fast you’re growing, and whether you’re managing any sensitive contracts, union obligations, or government requirements. However, the advice we give to most of our clients is to take some time to consider how you will put this new employee to work on day one. Suppose they need to be ready to negotiate executive-level contracts for an expanded C-Suite with international ambitions. In that case, you are going to want a senior professional onboard to guide the ship. On the other hand, if you’re ramping up manufacturing and have a substantial increase in employee health and safety onboarding to manage, a more junior associate with the backing of a trusted staffing agency may be just what you require.
Understanding the Types of Human Resource Specialists
As with most professions, Human Resource roles can become more specialized the larger and more complicated the company is. However, the easiest way to think about it is simply Junior, Intermediate, Managerial, and Senior Level Professionals. We’ll break down the most typical roles below.
Human Resources Assistant
A more entry-level professional, the HR Assistant typically has only a few years in the field, yet they perform an essential role as part of a larger HR team. An HR Assistant will typically do online applicant vetting to identify potential candidates for open positions, schedule interviews, and even conduct initial phone interviews. An Assistant level professional can also be involved in planing new employee orientation programs and maintaining employee records.
Salary Range: $38,000 – $52,000
Human Resources Associate
An intermediate level HR Professional, the Associate, can function as more of a generalist in a smaller organization or specialize in areas such as recruitment or benefits in a larger company. They are usually responsible for managing internal and external job postings, reviewing candidates, and preparing job offers. However, they may also be responsible for overseeing the benefits program and ensuring team members are enrolled and understand how the program works. In a company with a dedicated Human Resources Department, an associate will usually serve as the main point of contact for staff questions or concerns.
Salary Range: $40,000 – $74,000
Human Resources Manager
At the manager level, an HR professional in a larger company will oversee the tasks ordinarily delegated to their Associates or Assistants while also getting involved in higher-level strategic planning. Often working with the HR Director or other department heads, they will help map out a staffing plan based on the company’s forecasted needs. This role will usually work directly with recruitment agencies as the main point of contact to help screen potential applicants. An HR Manager will also work on employment contracts, negotiate salaries, and help facilitate employee terminations if required. It’s not uncommon for an HR Manager to be the sole Human Resources professional on staff in a small or medium-sized company.
Salary Range: $55,000 – $123,000
Human Resources Director
As a more senior HR position, a Director tends to be removed from day-to-day Human Resource operations and is charged with overseeing the company’s long-term strategic recruitment and staff policy objectives. As a seasoned professional, they provide consultation to management on recruitment needs, compensation, benefits, training and development, budget, and labour relations. Usually, in a position of managing the Human Resource Department, an HR Director will often be part of the senior leadership team.
Salary Range: $119,000 – $169,000
A few more considerations
It can be difficult for smaller companies to decide if the extra salary will be worth the advantages of having in-house Human Resource expertise.
Here are a few more things to consider if you’re struggling to make the decision.
The first thing is your business regulation environment. If you work in a highly regulated industry, an HR specialist on the team will add considerable value, even for small businesses. Having this extra person can free up the leadership team (or solo entrepreneur) to focus on delivering the product or service. Just be sure the candidate you select has the relevant understanding of your industry rules.
The next thing to consider is your corporate growth forecast. If you see a steady growth rate continuing or the potential for a rapid ramp-up, having a professional on staff to get the right people in place and working will be more than worth the extra salary.
Of course, if you’re really struggling to make the decision, spend some time developing a job description. Listing all the things an HR specialist can take off your plate will help you get a sense of their value. You may determine that your company simply doesn’t need the extra person at this stage when you list it out. However, you now have the beginnings of a benchmark for deciding when it’s time to add an HR specialist.
As recruitment specialists working with companies of all sizes, we’re here to assist you and provide guidance if you are still questioning the need for an internal HR resource. Our team of professionals can help you crunch the numbers and weigh the benefits of bringing this skill set in-house. We can also advise you on what level of expertise will be of most use to your current situation and help you plan your staffing needs as you grow.