As your startup scales, the complexity of managing your team grows exponentially. In the early stages, it’s common for founders to wear multiple hats, including handling HR tasks. But as your business expands, the demands of hiring, managing people, and ensuring compliance become too much for one person to handle effectively. So, how do you decide when to hire an HR professional?
The answer is simpler than you might think: yesterday.
The Cost of Waiting to Hire HR
It’s tempting to put off hiring an HR professional when your company is in its early stages. After all, you’re focusing on growing the business and conserving resources. But this short-term mindset can cost you dearly in the long run.
Startups often bring in HR professionals too late. Everyone wants to save money until the problems pile up—like a car you avoid maintaining until it breaks down. You end up spending more time and money to fix issues that you could have addressed early on. It’s the same with people operations. You can’t measure the direct ROI of hiring an HR professional right away. You won’t see a 10% revenue bump because you put in a great recruiting system from the start, for example. But think of all the time and money you’ll waste by winging it—for example, having the CEO sit in on every job interview instead of focusing on the bigger picture.
In my own experience, I was hired by a company just three weeks before performance review time. When I arrived, I discovered that the performance review process was a mere box-checking exercise—nothing more than a formality. I immediately set out to overhaul it. The problem? Years of valuable data from employee feedback and performance reviews had been ignored, sitting in filing boxes and collecting dust. There were potentially hidden insights—new revenue ideas, operational efficiencies, or ways to reduce staff time—that were never uncovered. Now, those opportunities are lost forever.
This is exactly why hiring an HR professional early on is essential. They can help you build systems, processes, and a culture that supports your team and drives long-term growth.
When Is the Right Time to Hire an HR Professional?
While every business is different, there are signs that it’s time to bring in someone with expertise in HR. Here are the most common indicators:
1. You’re Struggling to Keep Up with Hiring Demands
As your startup grows, so does your need for more talent. At first, the founder or a small team might be able to handle recruiting. But once you’re looking to hire multiple people, juggling candidate interviews, onboarding, and paperwork becomes a full-time job. HR professionals specialize in streamlining these processes, making hiring more efficient, and ensuring you’re attracting top talent.
2. Your Team Is Expanding, and Your Culture Needs Structure
When you’re a small team, company culture can feel organic—everyone knows each other, and collaboration flows naturally. But as you grow, maintaining a cohesive culture can become difficult. HR professionals help design and nurture company culture by putting in place policies, communication strategies, and programs that align with your core values. They ensure that your culture scales alongside your team.
3. You’re Facing Employee Relations Issues
As your workforce grows, so too does the likelihood of workplace conflicts, performance issues, and other employee relations challenges. Handling these disputes requires a neutral party and a structured approach. HR professionals manage conflict, improve communication, and implement performance management systems that benefit both employees and the company.
4. Your Processes Are Inconsistent or Inefficient
If you’re relying on informal processes for payroll, benefits, performance reviews, or employee communication, these inconsistencies can cause confusion, errors, and inefficiencies. An HR professional brings structure to these processes, automating tasks where possible and ensuring that everything is documented and compliant.
5. You’re Spending Too Much Time on HR Tasks
If you, as the CEO or founder, are spending significant time on HR-related tasks—whether it’s sorting through resumes, managing employee disputes, or ensuring payroll is correct—you’re likely losing focus on what really matters: growing your business. Bringing in an HR professional lets you offload these responsibilities, allowing you to focus on strategic initiatives that will drive growth.
The Hidden Costs of Avoiding HR
When you delay hiring an HR professional, the costs aren’t always immediately apparent. For example, you may not notice lost revenue opportunities from ineffective performance reviews, or the time wasted on inefficient hiring processes. However, these inefficiencies accumulate over time and can stunt your company’s growth.
In the case of performance reviews I mentioned earlier, the opportunity cost was huge. By not having a system in place to gather and act on employee feedback, the company missed out on valuable insights that could have driven both operational improvements and new revenue streams. These are the types of issues HR professionals help prevent by establishing efficient systems, gathering valuable data, and ensuring that your people are aligned with your business goals.
Conclusion: Don’t Wait to Hire HR
Ultimately, the question of when to hire HR is not one that should be answered “later.” If you’re asking when it’s time to bring in an HR professional, the answer is likely “yesterday.” The sooner you invest in HR, the sooner you’ll benefit from streamlined operations, a more engaged workforce, and a stronger company culture.
