If you’re reading this, you might be feeling the strain of not having a dedicated HR professional, but you’re also not sure if you’re ready for a full-time hire.
Maybe you’ve got leaders juggling HR tasks. Maybe hiring feels inconsistent, employee questions are taking more time, or you’re starting to worry about compliance as you grow. These are common pressure points for growing organizations, and they often show up well before anyone feels confident enough to say, “We need HR.”
In this post, we’ll walk through some signs that it’s time for your organization to bring in some HR help.
What the Research Says About When Companies Actually Make Their First HR Hire
There’s no law that requires HR at a specific size. But there is some data about when organizations typically stop relying on ad‑hoc HR and bring in a dedicated professional.
- An analysis of 973 companies found that most companies make their first dedicated HR hire between 40–50 employees, and that nearly all companies have at least one HR FTE by 100 employees.
- Separate research shows the first HR hire often appears around headcount #39, on average, across early‑stage companies.
- Research shows that even among organizations with fewer than 50 employees, about half already have an HR department, and those that do report higher job satisfaction and more consistent practices.
These benchmarks aren’t rules. But they show a pattern: as organizations grow, HR responsibilities become too large, too specialized, and too risky to leave scattered across leaders without HR expertise.
The Real Question Is Not “How Many Employees?” But “What’s Happening Inside the Business?”
The tipping point for bringing in HR help shouldn’t necessarily be driven by a specific employee count, but based on what’s happening in the organization. Research on small and growing organizations shows that HR needs emerge when the organization has a combination of these pressures:
1. Leaders Are Spending Too Much Time on HR
Before companies hire HR, founders, leaders, or managers typically 20-30+ hours per week across hiring, onboarding, employee relations, and compliance. (this article cites an average of 28 hours/week.)
If HR is taking leaders away from strategic work, you’re already feeling one of the strongest signals.
2. Hiring Volume or Complexity Increases
Studies show that as organizations add roles, diversify job functions, or hire in multiple locations, the informal system breaks down. Job descriptions vary, hiring isn’t standardized, and onboarding becomes inconsistent.
HR becomes more important when:
- You expect to hire 5-10+ roles in the next 12 months
- You’re building new functions
- You have multiple people hiring with different approaches
- Recruiting is consuming leadership bandwidth
3. Legal Exposure Grows
Employment laws apply at specific thresholds Here are some of the most common thresholds and what changes at each:
- 15 employees: Federal anti-discrimination laws (Title VII, ADA) apply.
- 20 employees: ADEA and COBRA requirements begin.
- 50 employees: FMLA obligations and some ACA responsibilities start.
- 100 employees: WARN Act notice rules may apply during layoffs.
You don’t need to wait until you reach one of these thresholds to consider HR. If you’re unsure about compliance, documentation, or consistent application of policies, you’re already at risk.
4. People Issues Start to Outpace the Informal System
Research shows that small organizations formalize HR when their current approach stops working, a pattern supported by studies like this one, which found that companies adopt formal HR when day‑to‑day issues become too time‑consuming or too complex for informal management to handle.
Clear signs:
- Increase in employee conflicts or complaints
- Difficulty managing underperformance
- Managers unsure how to document issues
- Turnover increasing
This is when organizations realize they’re relying on leaders who are not trained in HR and who don’t have time to learn it.
5. The Organization Wants Consistency, Fairness, and Better People Practices
Research consistently shows that organizations with HR professionals:
- Use more consistent and effective HR practices
- Provide better training and development
- Have clearer performance management processes
- Report higher employee satisfaction
Research on high‑performance work systems shows that companies get better results from their people practices when an HR professional is in place to support and manage them.
If you’re starting to prioritize retention, manager effectiveness, or employee experience, HR is no longer a “nice to have.”
So When Should You Make the First HR Hire?
Here’s the clearest, research‑supported guidance:
You should bring in your first HR professional when you begin experiencing multiple indicators, not when you hit a specific headcount.
The most reliable signals are:
- Leaders are spending too much time on HR work
- You’re hiring regularly or expanding into new roles
- You’re navigating multi‑state or more complex compliance issues
- Employee issues are becoming more frequent or harder to manage
- You want better structure around performance, compensation, or culture
Most organizations experience these conditions well before they approach triple‑digit employees.
The key takeaway from the research: organizations that formalize HR earlier tend to have more consistent people practices, better job satisfaction, and fewer unforced errors.
What Type of HR Support Do You Need First?
Once you start to feel the need for HR support, you don’t have to jump straight to a permanent or full-time hire. You have a few options: hiring an HR employee, outsourcing HR, or leveraging fractional HR.
Permanent or Full-Time HR Hire
In many growing organizations, the first HR hire is an HR Generalist or an HR Manager or Director. This role can handle daily HR questions, support recruiting, manage compliance, and build foundational processes.
Internal HR is the best fit when your needs are ongoing and you want someone embedded in your culture.
Outsourced HR
Outsourced HR works well when you need support for payroll, benefits administration, and core HR administration without adding headcount.
It’s a good fit when you want the administrative foundation handled while you focus on higher‑level people needs as you grow.
Fractional HR
Fractional HR gives you part‑time access to a seasoned HR professional. It’s a strong option when you’re growing quickly, need to stabilize HR, or want both strategic and hands-on support without committing to a full‑time leader.
Many organizations start with fractional HR, then move to internal HR when their needs become more consistent.
If growth, complexity, or people issues are picking up, HR is no longer optional. It’s the support your managers need, the protection your organization needs, and the structure your people need to do their best work.
