Should You Hire an HR Manager?

As your company grows you start to question if you should hire an HR Manager. Or, do you not need one? When to hire an HR Manager?

It’s best to have a strong HR presence early that way you can build a company mission, vision, values, culture and vital HR foundation. This allows the success of your employees and your business. So what are the pros and cons of having an in-house HR department rather than outsourcing?

Pros:

  1. An in-house department can have intimate familiarity with the company culture, mission and vision.
  2. They may be well equipped to manage big-picture questions regarding recruiting, retention and other HR matters.
  3. They work directly with management allowing them to adapt to company needs in a short time period which would be a benefit of having hr department.

Cons:

  1. Hiring, training and maintaining an in-house HR team is expensive.
  2. Your company must negotiate its own medical and retirement benefits.
  3. Expertise may be lacking in one or more critical areas of HR. Laws, regulations and best practices are ever-evolving. An in-house team must be diligent to stay abreast of changes.
  4. All compliance, regulatory and other employer-related risks fall on the employer.
  5. A large HR department, like any other growing department, must be managed to ensure it’s aligned with the company’s overall goals and strategies. There is risk that an in-house HR team’s goals diverge from that of the company, which could have broad impacts on other areas of the business.

When you hire a PEO, you enter a co-employment relationship meaning the PEO takes on employer-related responsibilities like Human Resources. You, as then business owner, still maintain the management of your employees.

An in-house HR representative is still needed, but you gain access to the PEO’s clout, expertise, resources and benefits.

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