According to the U.S. Small Business Administration, small businesses accounted for 62 percent of net new jobs. They play an important role in our economy. But one of the biggest questions that small businesses face is how to successfully grow their organization. Specifically, when and how to bring the HR function into the company. That’s what today’s reader wants to know.
Our firm has about 80 people, and we’ve decided it’s time to ramp up our HR function. Until now, it’s been handled by accounting and some outsourced vendors. What we really need help in is recruiting, but we also need to build training, HR coaching, and other strategic HR services and systems. Who should our first hire be: a recruiter? HR generalist? Strategic HR leader? Of course, we don’t have an unlimited budget. Your help would be appreciated.
I think this is a great question. Let’s walk through the advantages and potential disadvantages in creating an HR function.
Recruiter: This is often the first hire that organizations make. Talent is a key differentiator for organizations and they want the best. Right now, it’s tough to find qualified candidates. So, having someone dedicated to the talent acquisition process makes a lot of sense. The reader’s note mentions other HR functions like training, coaching, etc.
The company will have to eventually decide if they are going to bring in a second person to cover the other non-recruiting needs of the company. Chances are the recruiter would report to that second person. The decision will have to be made whether hiring the junior person first makes sense.
Another option is for the company to invest in developing the recruiter. That’s going to be dependent on the company’s resources and time. The faster you need the training, coaching, strategic HR, the less likely you’ll have the time to develop internal talent.
HR Generalist: You might be saying to yourself, “A generalist knows a little bit about all the functions of human resources. They’re the ideal position to bring on first.” And you’re right. A generalist should be able to handle recruiting, training, coaching, etc. Can they handle strategic HR? Hmmm…don’t know.
This situation is similar to the recruiter. The company will have to decide if the generalist is capable of doing everything the company wants and needs. If not, the company might need to bring on another person. The organization can also make an investment into developing the HR generalist for greater responsibilities.
HR Leader: I don’t know how much budget the company has to hire someone, but let’s get this out on the table. Hiring a strategic HR leader for a small organization will cost you. That being said, the leader will have the experience to build a human resources function from nothing.
Organizations considering this approach should be open with the HR leader about their goals. In this situation, the HR Leader’s job is two-fold: 1) build an HR function, 2) hire and train their replacement. There are HR pros who have built careers on setting organizations up for success and then planning their exit strategy.
Each one of these hiring options has their own pros and cons. Companies need to decide what’s important to them in making this decision. Ask the question, “What are we trying to accomplish? Which position gets us there?” All of them can. Some of the roles will require time to develop skills and resources for training.
One other thing to mention. We’ve been talking about hiring an HR pro. Which kinda implies hiring someone from the outside. These same philosophies would apply if the company is considering giving an internal candidate a role to create the human resources department. The company can also engage a strategic HR consultant to work with an internal employee to get the function up and running.
The good news is that organizations have option when it comes to creating their human resources function. Make the decision based on company needs and goals . . . and budget.
P.S. Today’s image (captured at the 2106 HR Tech Conference) reminded me that it’s time to start thinking about the HR Technology Conference & Expo. The event will be held September 11-14, 2018 in Las Vegas. Keynote speakers include Mike Rowe and Randi Zuckerberg. Use the promotion code TW18 and save!13