This question comes up all the time, usually at the exact moment something feels a bit wobbly … and guess what? The answer is NOT when you’re already in the shit!

All jokes aside, let’s look at this properly.

A business owner rings me and says something like, “I think I need HR now” and when we unpack it, what they really mean is one of three things:

• They are about to hire their first person and feel nervous
• They have people already and something has gone wrong
• Or the business has grown to a point where the old informal way of doing things is creaking loudly.

What people actually mean when they ask, “When do I need HR?”

Firstly let’s get this straight – HR is not one thing and needing HR does not automatically mean employing someone full time and sticking them in an office with a policy binder.

By yes, you do need HR the moment you take on your first employee.

That usually surprises people. There is a belief that HR is something you add later once you are bigger, more grown up, more corporate. In reality, the second you employ someone, you are entering into a legal, financial and human relationship that carries risk and responsibility.

From day one you are dealing with contracts, right to work checks, pay, holidays, sickness, performance, behaviour and expectations. You are also setting the tone for how work feels in your business. Whether you intend to or not, you are creating culture.

At this stage, what you need is not an internal HR person. What you need is clarity, structure and someone to stop you making expensive mistakes because you are busy, optimistic and trying to do the right thing.

This is where external HR makes sense – to give advice, provide documents, be a sounding board and someone who can say “pause, let’s think this through” before you agree to something that boxes you in for years.

Most problems I see at 10, 20 or 30 employees started with a well-meaning decision made when the business was tiny and no one stopped to ask about the knock-on effects.

Which brings us to an important distinction ….

When people say “HR”, what do they actually mean?

Some people mean admin – contracts, policies, letters, processes, record keeping.

Some people mean advice – What can I do here? What are my options? What is the risk?

Some people mean strategy – how do I build a team that can scale? How do I stop culture drifting? How do I get managers leading properly rather than firefighting?

And some people think HR is one person who does all of this, all the time, internally.

That assumption is where a lot of businesses burn money!!

Internal HR tends to get hired when pain is already present. Usually around 30 to 50 employees. The logic is understandable – there are more people, more issues, more admin, more noise and ultimately someone internally needs to “own HR”.

However, at this size, most businesses do not need a full time internal HR generalist. What they need is admin support and senior thinking, not a mid-level catch all role that ends up buried in paperwork and employee drama.

This is why the “around 50 employees” rule exists for taking on an internal HR bod, but it is a very blunt instrument.

At around 50 people, you absolutely need more structure. Managers need clearer expectations. Performance issues take longer to resolve. Culture needs attention. The founder cannot hold everything in their head anymore.

In my experience, the solution is rarely a single internal HR hire who is expected to be tactical, strategic, legal and emotional support all at once. Often, better value comes from separating the work.

HR admin can be handled by a junior internal role or outsourced support. Someone who keeps things tidy, consistent and compliant.

Strategic HR – the thinking, the challenge, the planning, the decisions that shape the next 2 to 5 years, is often better handled externally or fractionally. Someone who is not caught up in internal politics, who has seen what happens in other businesses, who understands growth, risk and commercial reality.

This is where the conversation should shift from “Do we need HR?” to “What level of HR do we need right now?”

What level of HR do we need right now?

• Early stage businesses need guidance and guardrails.
• Growing businesses need consistency and capability.
• Scaling businesses need strategy, leadership development and cultural nuance.

The mistake is assuming that internal automatically equals better!

Internal HR can be brilliant, in the right business, at the right time, with the right brief. But too often I see internal HR hired too early, or hired with unclear expectations, and then pulled into admin and conflict management with no space to do the work that actually moves the business forward.

This is where the way I work tends to make sense for founders and CEOs.

I work alongside businesses at the level they actually need, not the level they think they are supposed to have. Sometimes that is advisory, sometimes it is building the foundations properly. Sometimes it is stepping into a more strategic role, shaping leadership behaviour, decision making and long term people plans.

As businesses grow, the work shifts and there should be less firefighting and a lot more planning. Less “can I do this?” and more “should we do this given where we are going?”

When and if an internal HR hire makes sense, my role often shifts again into supporting them, upskilling them, acting as a strategic partner rather than disappearing and leaving them to reinvent the wheel.

That is where the real value sits – continuity, context and commercial understanding. A long term view of your business rather than a short term fix.

So, when do you need HR?

You need it earlier than you think.

You need it in a form that fits your stage, not someone else’s org chart.

And you need to think about HR as a capability, not a job title.

If you are hiring your first employee, growing beyond a small tight knit team, or feeling that familiar sense of things starting to feel heavier and harder, that is usually the signal.

The right HR support should give you confidence, clarity and control, not another salary and certainly not another problem to manage.

If this has made you rethink what HR could look like in your business, that conversation is exactly where I work best.

HR in 2026 and beyond

This year, the stakes are higher!

With the legislative changes coming through, with tighter expectations around fair process, predictable working patterns and 6 month unfair dismissal protections, the margin for error is shrinking.

Informal, well intentioned decision making is no longer enough to keep you safe. You will need updated contracts, refreshed policies, clearer processes and managers who actually understand what they can and cannot do. Hoping for the best or relying on what you downloaded 3 years ago simply will not cut it.

Any business with staff now needs to be actively building a relationship with a commercially minded HR partner. Not someone who throws you templates, baulks at risk or hides behind policy, but someone who understands profit, growth, investor pressure and the reality of running a business. Someone who can help you design systems that protect you without suffocating you, who can sense check your decisions before they become tribunal bundles and who can translate legislation into practical action.

The cost of getting it wrong has always been high, but it is about to get a lot higher. Court, reputational damage and management time lost to messy processes are all far more expensive than proactive, strategic HR support.

So, if you are serious about protecting what you have built and serious about staying out of court, now is the time to stop seeing HR as optional. It is a commercial safeguard and a growth lever and believe me, in this climate, you do not want to be navigating it alone!

So the real question now is this:

Where is your business right now, and what level of HR do you actually need?

If you’re unsure or would like to talk it through, just reply to this email and we’ll jump on a call.

But if you already know which box you fall into, here’s where to go next:

1. “We’re small, growing and I just need things sorted properly.”

Contracts, compliance, documents, structure, risk… you want it done right, done quickly and done without drama.
If that’s you, HR Sorted & Supported is designed for exactly this stage.
It gives you clarity, consistency and a proper HR foundation without the cost of an internal hire.

2. “Our culture isn’t where it should be. People are central to our growth and things feel wobbly.”

If you know instinctively that culture is slipping, managers are firefighting, or behaviour is starting to cost you time and money, your next step is Foundations of Success.
This is where we rebuild expectations, leadership habits, communication, and team dynamics so your business can scale without chaos.

3. “We’re scaling fast and I need strategic HR, not admin.”

If you’re past the basics and what you really need is senior HR thinking, someone who can challenge decisions, shape the next 2–5 years and protect your commercial goals, this is where my Fractional HR Leadership support fits.

It gives you the strategic capability of a senior HR leader, without the salary, without the politics, and without another internal fire-fighting hire and that’s going to need a much bigger conversation so just get in touch.