Growing Beyond One

When might it be time for an HR department of one to increase its staff?

With limited resources, it may be difficult for HR to find time to adequately focus on performance management, said Debra Steiner Friedman, an attorney with Cozen O’Connor in Philadelphia.

Friedman said some signs that it is time to add HR staff include:

• There is a noticeable increase in employee claims alleging legal violations.
• The company is the subject of recurring government audits or investigations into workplace safety, wage violations, or fair employment practices compliance.
• Employee morale is low and is impacting productivity and retention.

“A decline in employee engagement and morale could result in a rise in employee complaints and grievances,” said Kristi Thomas, an attorney with SheppardMullin in Orange County, Calif.

Common compliance challenges include staying current with employment laws, classifying employees correctly, managing wage and hour compliance, coordinating leaves of absence, ensuring required trainings are performed, thorough record-keeping and documentation, updating policies and employee handbooks, handling terminations correctly, and managing employee complaints and procedures, Thomas said. 

When compliance deadlines start feeling like surprise attacks or when employees are waiting days for responses to basic HR questions, it’s time to have a staffing conversation, said Jeremy York, SHRM-SCP, lead consultant and president with InvigorateHR in Indianapolis.

“Company growth is an obvious trigger — especially if you’re approaching 100 employees or expanding into new states,” he said. “But also look at the complexity of your HR issues. If you’re spending all your time on employee relations issues and compliance is taking a back seat, that’s a clear signal you need support.”

In addition, when HR is having a hard time prioritizing projects because they all seem important and there’s not enough time to handle everything, it may be time to expand the department, said Bethany Wagner, an attorney with Ogletree Deakins in Pittsburgh.

“Pay attention to what you hear from your co-workers,” she said. “What’s HR’s reputation? Nonresponsive? If so, it’s probably time to add staff.”

Another telltale sign is frequent mistakes, Wagner added. If HR finds itself cutting corners or missing important projects — for example, forgetting to send leave letters — it may need help fulfilling all compliance duties, she said.

Getting Needed Support

If efforts to grow the HR department don’t succeed, an HR department of one is probably not going to be able to keep up with all compliance efforts without support and resources. However, these compliance issues need to be prioritized, said David Epstein, SHRM-SCP, director of human resources and talent strategy with Mobilization for Justice in New York City.  

“They should communicate with leadership that compliance is a priority, building it into the HR/organizational strategic plan. Other HR duties may need to be put on the back burner so that compliance is prioritized,” he said. “The HR practitioner should advocate for additional resources such as outside counsel to assist, as needed.”  

A rule of thumb is that once you reach a staff of 50, an outside employment counsel is needed on a regular basis, Epstein said.

“You may also need to expand the bench of resources to include an ERISA/benefits attorney, as well as consider a PEO [professional employer organization] to do some of the HR functions, if time is needed to be freed up to work on other HR duties,” he said. “You can’t do it all as one person, but being out of compliance can have significant consequences such as fines and organizational reputational issues. It is important for HR to communicate to leadership what can and can’t be realistically done with the resources available.”