Scaling a business is exhilarating—but growth also brings complexity, risk and human dynamics that demand more than the founder’s personal attention can often provide. As your workforce grows and evolves, so do compliance obligations, training demands and cultural expectations. And with 59% of employees now expecting HR to be accessible around the clock, at some point, the business’s most important asset—its people—becomes its greatest risk, unless supported by dedicated HR infrastructure and leadership. That’s when informal approaches give way to intentional, scalable human resources strategies.
The question is: When exactly should that transition happen—and what should you look for? The members of the Senior Executive HR Think Tank, a curated group of experts specializing in employee experience, talent acquisition, DEI, performance management and the role of AI in HR, share the key signals that arise when it’s time to build out your company’s HR capabilities, as well as practical guidance and the foundational HR competencies needed to support a growing company.
“You’ll start to feel it when culture, communication and consistency start slipping through the cracks.”
People Become Your Biggest Asset—and Your Biggest Risk
Nicole Cable, Chief People and Experience Officer at Blue Zones Health, argues that the need for a dedicated HR function becomes clear when people evolve from being just “staff” to becoming the organization’s most valuable—and vulnerable—asset. She notes: “You’ll start to feel it when culture, communication and consistency start slipping through the cracks. It’s when hiring, feedback or compliance become reactive instead of intentional.”
In her view, a growing organization needs HR leaders who do more than just manage transactions. They must also understand human behavior, build trust and create systems that scale without losing soul. “HR should be the bridge between business strategy and the human experience,” Cable says.
When your people become critical to your competitive advantage—and also to your legal and reputational risk—HR must transition from occasional admin support to a strategic function.
The 50–75 Employee Threshold
After 25 years of recruiting and talent acquisition across small firms and large enterprises, Lauren Francis, Founder and CEO of Mulberry Talent Partners, points out a practical benchmark: Many companies bring on an in-house HR professional once they reach roughly 50–75 employees. Smaller organizations often rely on outsourced HR support until their needs become too complex for ad-hoc arrangements.
It’s often when companies hit that threshold of around 50 employees that they see more structured job roles, greater need for formal policies and stronger demands for consistent hiring and onboarding processes. However, it’s not just a numbers game alone: “The decision to introduce a dedicated HR professional typically depends on the complexity of the business and the evolving needs of its employees,” Francis says.
Industry, Complexity and Operational Risk Shape the Decision
Steve Degnan, Advisor, Board Member and former CHRO, notes that the right time to add HR often depends not just on headcount but also on industry, complexity of operations and workforce composition. “Size and number of people is the key driver, but it varies by type of business,” he says. “Generally, reaching 100 employees is a good rule-of-thumb number to consider some sort of dedicated HR staff to manage growing systems, payroll, benefits and training needs.”
However, Degnan cautions that businesses with heavy compliance, multiple job types or manufacturing operations often need HR support even earlier. On the other hand, companies composed mostly of office or remote workers may be able to delay adding full-time HR staff. He also notes that cultural dynamics can play an important role: “Transparent, well-led teams may be able to forgo a classic HR generalist a bit longer than teams struggling with legacy culture issues, being acquired or experiencing disruption.”
“Introducing HR isn’t just about hiring someone—it’s about institutionalizing a people-centered approach.”
Institutionalizing People-Centered Infrastructure
Ulrike Hildebrand, Strategic HR Advisor and Senior Consultant at Pin-Point Solutions, LLC, emphasizes that the decision to bring in HR should not only be about headcount but about establishing a sustainable, people-centered operating model. She notes that the signals are sometimes more subtle: inconsistent management decisions, overwhelmed leadership, growing complaints, disengagement or drift in culture.
“Introducing HR isn’t just about hiring someone—it’s about institutionalizing a people-centered approach,” she says. HR, in this view, provides the architecture: organizational structure, scalable protocols, and fair and consistent processes. She outlines essential skill sets: the ability to design organizational architecture, create foundational systems and apply practical compliance knowledge. Automation and outsourcing can handle many transactional tasks—but judgment, context and fairness cannot be outsourced.
“Businesses that thrive take the time to notice these subtle shifts and fix them before they spiral.”
The Hidden Early Signals: Administrative Burden, Confusion and Turnover
According to Kelly Murphy, Founder and Strategic HR Advisor at Lean In HR, some of the key clues that a business needs dedicated HR can even come when the company is still in the early stages: “Informal HR processes typically start to show cracks after 10 employees.” It’s then that administrative tasks start piling up, communications break down and employees begin asking questions such as, “Why does this person get X and I don’t?”
Other warning signs include rising administrative burden, growing complexity (such as expansion into new states or locations where employment laws differ), shifting morale, a drifting culture or unexpected turnover. These are subtle, but powerful signals that the “do-it-yourself” HR model is sinking under its own weight.
“Businesses that thrive take the time to notice these subtle shifts and fix them before they spiral,” Murphy notes.
Quick Tips for Concerned Leaders
- Watch for culture cracks. Slipping communication, inconsistent practices and reactive people issues signal it’s time for dedicated HR leadership.
- Use 50–75 employees as your cue. This is when in-house HR becomes essential to handle growing complexity and employee needs.
- Factor in industry complexity. Manufacturing, multi-role teams or cultural disruption may require HR support far earlier than office-based businesses.
- Build people systems before you need them. Act when managers seem overwhelmed or decisions become inconsistent, as infrastructure should come before a crisis.
- Catch early signs of strain. Administrative overload, confusion or morale dips can emerge as early as 10 employees and shouldn’t be ignored.
Setting the Foundation for Scalable, People-Centered Growth
For growing businesses, building a dedicated HR function is not just a nice-to-have—it becomes essential when informal processes no longer support people, culture and compliance. As the Senior Executive HR Think Tank makes clear, headcount thresholds like 50, 75 or 100 employees can serve as useful guidelines, but other key signals are often more subtle: administrative burden, inconsistent practices, compliance risk, and drift in culture or morale.
By recognizing these signs early—and by investing in HR professionals with the right mix of judgment, systems-thinking, compliance expertise and human empathy—companies set themselves up not only to manage growth, but also to build engaged, resilient organizations where people and performance thrive together.
