The consensus among HR leaders is that once you’ve reached the 20-employee mark, it is definitely time to expand the way your company handles HR, from growing your own HR department to investing in powerful HR resources and technology.

Consider the following when thinking about your own HR needs:

1. Timing

Before you implement growth measures for your HR department, verify that now is the right time. Your small business is flourishing, but how long has this growth spurt been under way? And how sustainable is it?

If your revenue forecasts are good and there’s a clear need to boost your headcount, then it’s time to expand your HR department. If you don't have the means to hire more staff, consider pursuing minimal cost HR platforms like our HR Resource Center, which keeps your company compliant without requiring an entire HR team. 

2. Subtle Indicators

Hard dollar signs aside, look for other (subtler) indicators that your HR department needs development— such as the following:

• You’re having trouble staying compliant with applicable HR laws.
• You’ve been penalized by the government because of noncompliance.
• Your HR team is stressed out or burdened by their workload.
• Employee morale has dropped because of insufficient HR support.
• You’ve outgrown your current administrative HR processes and systems.

3. HR Needs

To understand what to implement, you must break down your HR needs, see how they stack up against your budget and prioritize accordingly. During this process:

• Examine your current and foreseeable HR responsibilities, including recruiting, hiring, onboarding, compensation, health and safety, employee benefits, payroll, time tracking, performance management, training and development, regulatory compliance, and employee relations, retention and termination.  
• Review the methods you use to achieve your HR obligations, such as manual versus technology-assisted processes and external vendors.
• Note the new processes and employment laws you must adopt as your business grows.   
• Identify HR areas needing additional personnel.
• Estimate how many HR people you need and to what extent (such as full-time or part-time employees). Per the Society for Human Resource Management, small businesses with 1–250 employees often have an average of 3.40 HR people for every 100 employees.
• Determine job titles, duties and qualifications for your HR staff.

4. HR Resources

There are resources available that can help your HR team maintain compliance. For example, our HR Resource Center is a comprehensive solution that offers:

•  On demand trainings for both employees and supervisors (including sexual harassment prevention training)
• Up-to-date federal and state specific labor law posters and resources
• An employee handbook builder that guides you through the process step-by-step
• Unlimited confidential advice from employment law attorneys for help navigating employee issues

We offer a 6-month free trial to all new clients, so this may be a good place to start when thinking about expanding your HR department.

5. HR Strategy

Overhauling your HR function to accommodate a larger team and a more formal structure is a complex venture that should be executed in a strategic manner. Be sure to seek stakeholder input from managers, employees and business partners, to ensure a thoughtful, organized transition.

During strategy discussions, all options should be on the table to determine the most accurate, cost-efficient and secure way to manage your entire HR function.

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