When a baby is born, they are perfect. They haven’t had their first fall or scrape, haven’t tasted junk food, and certainly haven’t picked up any curse words yet. They come into the world untouched by bad habits or poor influences—a blank slate, full of potential.
I see new companies the same way. In the beginning, everything is fresh, full of possibility, and (on paper) nothing can go wrong. But just like raising a child, running a business comes with growing pains. And I get it—founders are busy, money is tight, and they don’t always know what they don’t know. So, they turn to Google, ChatGPT, a well-meaning friend, or worse—they assume they can go without an HR structure for a little while.
If I could choose my clients, I’d always pick the newborn over the five-year-old who has already developed bad habits—maybe even turned into a biter.
HR Problems Don’t Announce Themselves—Until They Do
I’ve had the privilege of helping over 200 startups and small businesses with their HR programs. In most cases, I’m the first HR person to step into their organization. Unfortunately, by the time they reach out, it’s usually because something has already gone wrong. Here are just a few real-life scenarios I’ve been called in to solve:
· “I need to fire someone.”
· “I fired someone, and now they’re suing.”
· “An employee just logged 200+ hours of unpaid overtime—do I have to pay them?”
· “We just found out an employee is secretly working two jobs.”
· “We don’t have employment agreements in place.”
· “My business partner is sexually harassing an employee.”
· “We can’t find talent, and it’s stalling our growth.”
· “The Ministry of Labor just showed up for an audit.”
· “We need to conduct a harassment investigation.”
· “We set up a pay structure we can’t sustain.”
Most of these companies had fewer than 30 employees. But as soon as you hire one employee, any of these problems can become your reality. And when they do, they don’t just cost money—they cost time, culture, and momentum.
A Tale of Two Companies: Why Timing Matters
Let’s take a look at two real-life tech startups that engaged HR at different stages of their growth.
Company A: Brought in HR with 2 Employees
· Established core values early
· Created an employee handbook
· Built customized employment agreements
· Completed compliance training
· Defined job descriptions for every role
📍 Current State when HR arrived: No turnover yet, morale is high, and although they’ve faced some hiring challenges, they are proactively building their team.
📈 Two Years Later: Now at 25 employees, minor voluntary turnover, morale remains strong, and they are on track to hit their growth targets.
Company B: Waited Until 20 Employees to Bring in HR
· No defined values
· No employee handbook
· A mix of verbal agreements and outdated Google contracts
· No compliance training
· Job descriptions copied from random Indeed postings
📍 Current State when HR arrived: Five employees have already left (some voluntarily, some involuntarily), morale is low, and hiring delays are impacting business growth.
📉 Two Years Later: Now at 30 employees, turnover has slowed, and morale is improving—but they are still struggling to meet growth targets because they’re constantly backfilling roles instead of focusing on expansion.
The Hidden Cost of Delayed HR
For Company B, the cost of waiting was steep:
· $10,000 in contract re-issuance fees
· $80,000 lost to turnover-related expenses (including severance)
· $350,000 in lost revenue due to hiring delays and stalled growth
The lesson? Building HR early isn’t just about avoiding legal risks—it’s about setting up a business that can scale smoothly.
The Good News: You Can Get Ahead of This
I’m not here to fearmonger. In fact, this is actually a success story.
When you bring in HR early, you don’t just avoid costly mistakes—you build the foundation for a company that can scale. With the right policies, processes, and people strategy in place, HR isn’t a roadblock—it’s a growth engine.
So, What’s Next?
If you’re a founder, ask yourself:
· Do I have the right documentation and policies in place?
· Am I prepared to handle an HR challenge if it comes up tomorrow?
· Do I want to build my company on solid ground—or scramble when something goes wrong?
Fractional HR gives you access to the expertise you need before problems arise—without the overhead of a full-time hire. Whether you’re hiring your first employee or scaling to 30+, building your HR foundation now will save you time, money, and stress down the road.
Ready to get proactive about HR? Let’s chat.
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