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As the owner of a small business, you may grow to the point where you need to hire staff for   human resources.

Help Wanted: Eight Reasons to Hire an HR Manager

As the owner of a small business, hopefully you grow to the point where you need to hire support staff such as marketing, IT and human resources. In the case of the latter, what should make you consider adding an in-house HR person?

  1. Economics. As the owner, if you start spending an inordinate amount of time dealing with personnel issues at the expense of developing new business, or if the cost of outsourcing HR exceeds what a staff member’s salary would be, it’s time to hire an HR person.
  2. Compliance. Certain, often-complex, government guidelines (OSHA, COBRA, HIPPA, FMLA, etc.) kick in depending on the number of staff you have. You run the risk of significant penalties should your company not be in compliance. 
  3. Talent. An HR person can perform the time-consuming work of recruiting, performing due diligence and sending offer letters. This helps you acquire the best talent in a timely manner. You don’t want to lose good people because you don’t act fast enough, and you don’t want to get the wrong people because you act too fast. 
  4. Payroll. An HR person can coordinate compensation issues, salary increases, bonus programs and expense reimbursements.
  5. Legal. You may want someone to mitigate potential legal risks with respect to conflict resolution, terminations and workers’ compensation.
  6. Training. You want to be able to train new staff and continue the education of current employees.
  7. Benefits. An HR person can help develop policies with respect to PTO time, 401(k) plan, health insurance and more. 
  8. Culture. HR can help safeguard the organization’s culture, build morale and foster internal communications.

While there’s no magic number, it is commonly thought that you should consider hiring an HR person when your company reaches a staff of between 25 and 50 people. Hopefully your company will grow to where you need an HR department of not just one, but many employees. 

Michael Aversa CPA is Partner-in-Charge of EisnerAmper Private Business Services Group, with over 35 years experience in private and public sectors. His expertise encompasses all aspects of accounting, auditing, reviews, tax and business consulting.

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