What does an HR person do and when should you think about hiring one?
So you've been online, trying to find the answer to this very tricky question: is it time for me to hire an HR person? And what do they actually do?
In this blog, I set out everything you need to know about HR for small business, including what an HR person does, what tasks they’re responsible for, and what size company needs an HR department (i.e. when you can get by, when you should outsource, and when you need at least one full-time HR person on the team).
Hiring an HR manager is an important step in any company's journey, but it’s probably a bit misleading to characterise this as a “step” at all. Most businesses can, and should, ease their way into formal HR structures as the organisation grows.
So how big does a company need to be to have HR? A lot of the time, the best option for a small business or startup isn't actually to hire someone to do the role full-time. For example, some companies will outsource their HR to a consultancy. And many smaller startups find that, with the right support, HR responsibilities can be taken on by a current member of the business, such as the Chief Operating Officer (COO), Operations Manager or Office Manager.
Slightly larger businesses may choose to employ a part-time HR professional, and only move to full-time once they’re past a certain size and it becomes a necessity.
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Ultimately, most paths to HR are legitimate — what really matters is being proactive about HR at your small business rather than ignoring it until a problem crops up. And there may be more ways to be proactive about HR than you think…
Let’s start with the basics and take it from there.
What does an HR person do?
An HR person (or an HR department) is responsible for all aspects of Human Resources at your business. In other words, they’re about people.
The main responsibilities of an HR person include recruitment and all related admin, employee relations and performance, leave management, training and development, and company perks and benefits. And they often do much more.
But whether it’s something as simple as booking holidays or as serious as a disciplinary meeting, it's the responsibility of the HR person to ensure your company follows UK employment law.
Because of that, your HR person needs to hold a qualification at CIPD (Chartered Institute of Personnel and Development) level. It's extremely important that the person you hire has these qualifications, as you want them to look after all of your HR and be able to hand it over completely.
Without a CIPD qualification, they won't be able to help you with complicated procedures or employment law challenges (and are probably better referred to as an operations associate or a culture associate, rather than an HR person). They’ll be able to take care of administrative tasks, but won't be able to provide HR expertise around legal matters. If you want to avoid also having to hire an HR consultant or an employment lawyer, make sure CIPD qualifications are listed as a requirement in the job description.
10 tasks an HR person or department does
To help you better understand HR for small business, I've listed all the tasks an HR person or department does. In fact, this is what (as Charlie's Senior People and Talent Partner) I'm responsible for day-to-day.
1 – Holidays and time off
An HR person’s most admin-heavy task is handling holiday bookings and time off requests.
Between annual leave, sick leave, maternity leave and more, it’s difficult to keep track of it all. And the more your business grows, the more bookings and requests you’re going to get.
Many startups and small businesses fall into the trap of using spreadsheets for tracking and recording time off, but they’re clunky, time-consuming and error-prone. With HR software like Charlie, your employees ‘self-serve’ by requesting leave directly in the system. All you have to do is approve or reject their request and Charlie does the rest. It’s a perfect solution for businesses who are not yet ready to hire an HR person.
2 – Employee handbook and HR policies
An employee handbook collates all of a business’ HR policies and procedures in one place.
Although it’s not a legal requirement to have an employee handbook, it is custom and practice for good employers. A handbook means your employees always have a point of reference for all HR policies and any procedures relating to them. So in this sense, an employee handbook may protect you from legal action.
3 – Performance management
Performance management is also another responsibility supported by HR.
Because it makes all the difference when you show your employees you care about how they're performing, and how you're willing to help.
At Charlie, we have reviews twice a year to track performance and talk specifically with our employees about their aims and ambitions, and what we can do as a company to help them reach their goals.
Our own software helps us to keep these reviews consistent and targeted — it uses industry-backed templates to ask the right questions and share insightful feedback between line manager and employee, and allowing you to add 360 feedback.
It also deals with the more “practical” aspects by sending out automatic reminders, prompting people to schedule a meeting and letting you watch it happening from afar through a dashboard.
For more info on performance management, check out our blogs:
4 – Development and career progression
Complementary to performance management is career development and progression.
At Charlie, we want our team to have all the tools they need to progress and take the next step in their careers. So as the HR person, I put together a budget allowance for L&D (learning and development), which our employees use to attend courses or conferences and learn new skills.
Our career progression framework is also a staple to make sure we reward our employees and set clear expectations when it comes to pay rises and promotions.
5 – Disciplinary meetings and grievances
HR departments and HR people don't always get to do the fun stuff. We're also responsible for handling disciplinaries and grievances.
This is why it's so crucial to create strong HR policies, as these are what your company relies on during difficult situations. Your HR person (CIPD qualified) needs to craft your policies ahead of when you need them, so that you can deal with the unexpected confidently and effectively.
To help you out, you are welcome to use any of these Charlie resources for free:
6 – Employee engagement and initiatives
Back to the fun part of HR! Boosting employee engagement with fun and initiatives.
A good HR person will never neglect employee engagement. They'll run employee engagement surveys to keep the finger on the pulse, and plan everything from summer parties to team bonding events. Building an inclusive workplace is about doing many different things.
7 – Benefits, allowances and budgets
Benefits, allowances and budgets ensure your team feels supported and you have a competitive advantage as an employer.
An experienced HR person will be able to find the right balance between what employees would like and what your business can afford.
For example, at Charlie we have individual wellbeing budgets of £30 per month, and work to a 9 day fortnight. You may want to consider doing something similar for your own team – we’ve also written a guide specific to UK employee benefits for your team.
8 – HR metrics
People are vital to your business, but HR metrics are something startups and small businesses often fail to track. But they're crucial for understanding business impact.
Whether it’s calculating the number of sick days people are taking or assessing the uptake in company benefits, analysing HR metrics results in data-driven decision making — i.e. you’re making decisions about people in response to what they’re doing, rather than based on assumptions.
9 – Recruitment
Recruiting new team members is a crucial part of HR, especially in a growing business.
When I started at Charlie, I put together a recruitment policy to set out everything requirements managers and recruiting teams need to know. They refer to this every time they recruit.
We also use our own Charlie Recruit tool to streamline hiring. Charlie Recruit gives our candidates a better experience and simplifies the hiring process for us. It automates your hiring pipeline and helps you streamline your recruitment process, whilst also ensuring you hire smartly and fairly.
10 – Reporting to the leadership team
Once you have someone looking after your HR, they’ll need to let you know what's going on.
As one of the business stakeholders, your HR person should report on HR metrics and provide you with regular insight into your people.
This can be done monthly, every six months or annually, depending on the objectives you set for HR and your business as a whole.
So, do you need to hire an HR person?
So what size company needs an HR department? Let’s start small and go from there…
If you're a very small business or early-stage startup (1-30 team members)
Small businesses with fewer than 30 employees usually don't need a dedicated HR person.
At this size, it’s generally the case that most HR tasks and challenges can be handled with a little knowledge and some good preparation.
As a new business, building strong HR foundations to support you as you grow is really important. Once you have these in place, your HR will tend to run itself.
And there are two ways to do this fairly easily:
- Get familiar with the three HR policies required by UK law: health and safety (required for organisations with more than five employees), disciplinary and dismissal, and grievance
- Get yourself an HR software: software like Charlie replaces the need for an HR person and automates all essential HR tasks (time off, onboarding, and performance management).
As a fellow small business, we know that you’re unlikely to have enough work to occupy a full-time HR person. So we built Charlie as the perfect HR stepping-stone. Instead of falling into the trap of hiring too soon (and potentially having to make tough decisions around redundancy), you can manage all of your HR with Charlie. It’s easy to set up, affordable and designed to support small businesses.
If you're a growing small business or startup (30-70 team members)
Once a small business starts moving towards the 20-person mark, you need someone to be officially responsible for HR.
That doesn’t need to be a dedicated HR professional or focused on HR full-time, however.
For companies of this size, the best option is for someone to take on the HR functions as part of a wider role — for example, Office Manager, COO, or from within the Operations team.
Whoever it is, the important thing is that they can prioritise HR tasks and are the recognised point of contact for any issues that arise.
There are several reasons why a dedicated HR person is vital at this size:
- Firstly, good HR processes means that your business will continue to run smoothly. HR tasks such as onboarding and preparing new employees for their role need a dedicated person to make sure they don't fall by the wayside. And it makes good business sense to have someone take the lead on hiring.
- Now is also a good time to put in place more formal performance reviews. Performance reviews are a crucial aspect of employee retention and help to drive performance across the team, so they can’t be left up to an ad hoc system. Again, this is an element of HR that needs someone to ‘own it’.
Remember this part-time HR person doesn't have to have an official HR qualification. If you’re already using HR software like Charlie, they’ll be able to rely on it to do most of the work for them.
They're there as a point of contact for HR issues, and as someone to oversee the development of your company culture, rather than to provide expert knowledge of employment law.
And for tricky issues, they can always seek professional HR advice like what we offer at Charlie.
An established small business (70+ employees)
By the time your company has grown anywhere near the 40-person mark, you're going to have to hire an HR professional.
With 50 team members, there’s an unmanageable number of HR tasks and admin to be kept on top of — recruitment, employee contracts, hiring processes, onboarding, payroll, performance reviews, probation reviews, share schemes etc. This is now a full-time role and it needs a dedicated HR person to get it right.
Again, they can rely on your HR software to keep everything running smoothly and may also look to streamline and improve other elements like recruitment. Charlie’s designed to grow as your business grows and our add-ons like Charlie Recruit will keep you ahead of the game as an employer.
Other HR needs that you should consider
Every business is different, so you shouldn’t consider anything in this blog as rules that are set in stone. And there are a couple of special cases when you may think about hiring a full-time HR professional much earlier:
If your startup is going to grow fast
If you know your business is going to grow a lot in a short space of time (say, increasing the team size by 100% or 50% within 6-12 months), it's a good idea to hire an HR person before you really need them.
This is because hiring and onboarding a large number of new employees is a full-time job.
A full-time HR person will save the rest of your team a vast amount of time and they’ll keep on top of the incoming mountain of contracts and other documents that accompany new hires.
Additionally, when a company grows significantly, its culture can change dramatically. Someone needs to make sure it’s not heading in a negative direction.
If you’ve got remote workers or distributed offices
If your team isn’t all in one place, you need to be thinking about full-time HR support much earlier.
If people are siloed off in various locations, the strain of a lack of proper HR structures is amplified. Managing people in different places is an intensive task, so you’re going to need a dedicated HR person sooner than many other companies.
As a rough estimate, look at the numbers above and halve them: you should have a part-time HR person well before you hit 20 employees, and increase up to full-time as you hit 25.
We hope you found this guide helpful, but don’t hesitate to check out our other resources if you need to! Our HR toolbox for small businesses, a one-stop-shop for busy leaders seeking free, compliant and efficient resources and documents to build and manage their HR.
