You Probably Need HR Expertise Before You Need a Full-Time HR Employee

A lot of growing businesses wait until they have 25, 50 or even 100 employees to think seriously about HR. But HR doesn't suddenly appear at employee #50. It starts with employee #1.

The first employee brings questions about pay, classification, documentation, workplace expectations and employment requirements. As additional employees join, those responsibilities become more complicated, even if a company does not yet have enough work to justify a full time HR position.

The U.S. Department of Labor notes that small businesses can have responsibilities involving employee pay, recordkeeping, workplace requirements and federal labor laws. Those obligations do not disappear simply because a company is small. That leaves growing businesses with a practical question: How much HR support do they actually need?

For many companies, the answer may not be a full time HR employee. Instead, it may be access to HR expertise on a part time, consulting or fractional basis.

HR Needs Grow Before HR Departments Do

In the early stages of a business, HR responsibilities are often divided among founders, managers, payroll providers or administrative employees. That can work when a company has only a few employees. But as the workforce grows, so does the number of decisions involving people.

There are more employees to hire and onboard. Managers begin supervising teams. Questions arise about performance, workplace conduct, benefits, compensation and leave. Employee records must be maintained, policies communicated and employment decisions documented consistently.

Eventually, those responsibilities can become difficult to manage alongside the day to day demands of running a business. That does not necessarily mean a company needs a full time HR department. It may simply mean the company needs HR expertise before it needs someone working in HR 40 hours a week.

Why 10 Employees Can Be a Turning Point

The Society for Human Resource Management has reported that small business owners and HR practitioners commonly identify around 10 employees as a point when HR responsibilities may begin to be delegated. SHRM also emphasizes that the number should not be treated as a universal formula. Businesses differ in industry, workforce, location and complexity.

Still, 10 employees can represent a meaningful change for a small business. At that point, a founder who previously handled every employee question may spend an increasing amount of time on hiring, onboarding, employee concerns and administrative issues. Delegating some of that work can allow business owners and managers to focus on operations and growth while ensuring employment matters receive appropriate attention.

For companies that are not ready for a full time HR employee, fractional HR can provide a middle ground. A fractional HR professional may work a set number of hours each week or month, assist during periods of rapid hiring or address specific needs such as compliance reviews, employee relations, recruiting and policy development.

There Is No Universal HR Formula

HR staffing levels also show that larger organizations are investing more in human resources. SHRM’s 2025 CHRO benchmarking data found that the median organization had 1.98 HR professionals for every 100 employees, compared with 1.11 in 2022 and 1.58 in 2017.

However, those numbers should not be treated as a formula. A 100 person company does not necessarily need exactly two HR professionals, just as a 10 person company does not necessarily need one.

The appropriate level of HR support depends on factors such as organizational complexity, industry, workforce needs and the responsibilities assigned to HR.

A 12 person company hiring rapidly across multiple locations and managing complicated employee issues may require more HR support than a 30 person company with a stable workforce.

A Staged Approach to HR

Rather than waiting for a specific headcount, businesses can approach HR support in stages.

With one to four employees, the priority should be establishing basic HR practices, including employee records, job descriptions, onboarding procedures and an understanding of applicable employment requirements.

Around five employees, businesses may benefit from outside HR consulting to review policies, documentation, classification, onboarding and compliance practices.Around 10 employees, fractional HR support may become useful as hiring, employee relations, compliance and people operations become more demanding. As the company continues to grow, leadership can reassess whether the volume and complexity of HR work justify bringing the function fully in house.

The Cost of Waiting

For business owners, the question should not necessarily be, “When can we afford a full time HR person?” A more useful question may be, “When do our people need expertise we do not currently have?”

The goal isn't to hire HR as soon as possible. The goal is to get the right level of HR support at the right stage of growth. Because fixing an HR problem after it happens is almost always harder than building the right process before it happens. You may not need a full-time HR professional yet. But you probably need HR expertise sooner than you think.

By Nadeen Maniord

Aug. 24, 2026

Sources

U.S. Department of Labor. “Small Business Resources.” U.S. Department of Labor, www.dol.gov.

Society for Human Resource Management. “2025 CHRO Benchmarking: Insights for Today’s HR Leaders.” SHRM, 2025.

Society for Human Resource Management. “When Should a Small Business Hire an HR Professional?” SHRM.

AIHR. “HR to Employee Ratio: How Many HR Professionals Do You Need?” Academy to Innovate HR.