Hire In-House
A dedicated employee, always on site — but a full salary and benefits, and one person can't cover everything.
Guide
When Should a Small Business Hire or Outsource HR?
Most owners wait too long to get HR help — usually until a problem forces it. Here's how to recognize the signs earlier, and how to weigh your options when the time comes.
The real question
It's less about headcount than about pain
There's no magic employee count that means "get HR." The better signal is how much time and risk HR is creating for you right now.
Some businesses need HR support at 10 employees; others limp along to 40. What matters is whether people issues are pulling you away from running the business, and whether the risk of getting something wrong is growing. If either is true, it's time.
Signs it's time
You probably need HR help if…
- People issues eat hours you should spend on the business
- You're not sure your business is actually compliant
- Hiring feels slow, chaotic, or hit-or-miss
- Turnover is rising and you don't know why
- You're growing past 15–20 employees
- You're hiring in a new state
- You've had a complaint, claim, or close call
- No one clearly "owns" HR in your business
Your options
Three ways to get HR help
Join a PEO
HR and benefits through co-employment — good for group benefit rates, but less control and potential lock-in.
Outsource / Fractional
An experienced HR team on demand, without co-employment or a full-time salary — flexible and cost-effective.
We compare these in depth in Outsourced HR vs. PEO vs. In-House.
The cost angle
What HR help actually costs
A full-time HR manager is a significant salary plus benefits — real money for a small business, and often more capacity than you need. Outsourced or fractional HR typically costs a fraction of that, because you're sharing an expert team rather than employing one person full time. For most small businesses, the math favors outsourcing until you're large enough to keep a full-time hire genuinely busy. The bigger cost is usually inaction: one mishandled termination or wage claim can dwarf a year of HR support.
The bottom line
Waiting usually costs more than acting
The businesses that struggle most are the ones that put off HR until a crisis forces the issue — a lawsuit, an audit, or a key employee walking out the door. Getting help earlier, even light-touch outsourced help, keeps small problems small and frees you to focus on growth instead of firefighting. If several of the signs above sound familiar, it's worth a conversation. There's no downside to simply finding out where you stand and what, if anything, you should do next.
The middle option
The half-step most businesses skip
The choice is usually framed as struggling on alone or hiring someone full-time. There is a step in between, and it is where most small businesses should start.
A full-time HR hire is a significant fixed cost, and at under fifty employees there is rarely enough work to occupy one — which is why those roles often drift into office management. The alternative is not doing nothing. A defined piece of work, done properly and handed over, resolves most of what makes HR feel unmanageable: a compliance review, a handbook that fits, and a hiring process that runs without you.
That approach also tells you what you actually need. Businesses that start with a review usually discover their problem is narrower than it felt — often two or three specific gaps rather than an absence of HR altogether. Knowing that makes the eventual decision about hiring in-house a much better informed one, and often defers it by a couple of years.
- A defined piece of work rather than a permanent hire
- The urgent gaps closed first
- A clearer view of what you actually need
- The in-house decision made later, with better information
FAQ
When to get HR help — questions
Many businesses benefit by the time they reach 10–20 employees, but there's no hard rule. If HR is taking too much of your time or creating risk, the right number is 'now' — regardless of headcount.
Think it might be time?
A free consultation is the easiest way to find out. No pressure — just a clear read on what you need.