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When to stop running HR yourself
Founders and finance leads carry HR until it costs more than it saves. Five signs it has, what to hand off first, and the three ways to do it.
The short answer
Stop when the work has started costing more than handing it off would, and that happens earlier than most founders think. Five signs: payroll takes a day of your week, a state you hired in was never registered, the handbook is a document nobody has opened since it was written, a manager asked you how to let someone go, and a request for headcount cost took a week. Two of those together is the moment. Hand off the recurring work first, payroll prep, onboarding and the compliance calendar, and keep every decision. Then choose between an HR hire, a PEO and a firm running your own HRIS, by headcount and by how many states you are in.
The five signs
Payroll takes your Friday. Approvals, changes, a new start date, a question about a deduction. If the person approving payroll is also the person preparing it, the company is paying its most expensive hour for its most routine task.
A state got missed. Someone was hired in a state where the company never registered. It shows up as a notice, months later, with interest. This one is silent until it is not.
The handbook is a document. Written once, acknowledged by nobody since, and not in the system where people would see it. Every policy question gets answered from memory, and the answers drift.
A manager asked how to let someone go. The first hard conversation in a company is usually the moment the founder realizes that HR was never about forms.
The data took a week. Headcount by team, cost per hire, who starts next month. If assembling that is a project, the system of record is a spreadsheet, whatever the software is called.
One sign on its own is a Tuesday. Two together is the moment.
What to hand off first
Not the decisions. Those stay with you at every size, and anyone who offers to take them is selling you something.
Hand off the recurring work, in this order:
- Payroll preparation. The changes, the checks, the file ready for your approval. You still approve it.
- Onboarding and offboarding. Set up in the system before day one, closed out properly on the last day.
- The compliance calendar. Registrations, renewals, filings and notices, with dates and an owner who is not you.
- The questions. Benefits, time off, a pay change, a policy. Answered from the system, by someone who knows your setup.
What is left is the work that needs you: who to hire, what to pay, how to handle the hard conversation. That is the part worth your time.
The three ways to do it
Hire someone. Right when you are past about 60 people, hiring steadily, and the role will have a full week of work in your systems once those systems exist. Wrong when the systems do not exist yet: the hire spends two quarters reconciling spreadsheets. See your first HR hire, and what to fix before it.
Join a PEO. Right under about 30 people in one state, when the benefits leverage is real and nobody can own HR this year. Wrong once you cross states, want your own benefits, or start acquiring. See when your PEO renewal goes up.
A firm on your own HRIS. Right between those two: 25 to 250 people, more than one state, and a system of record you want to own. The firm runs the recurring work inside your Rippling or HiBob, with a named lead, and the decisions stay with you. That is what our managed people ops is.
Most companies between 25 and 250 end up at the third for a few years, then hire into a working system.
What it costs you now
Price your own hours honestly. A founder at eight hours a week on people operations is the company’s most expensive administrator, and the cost that never shows on a budget line is the week of selling, building or raising that did not happen.
Add the quiet costs: the missed registration, the overpaid payroll, the hire who started without a laptop. Those are the ones that turn up in diligence.
Work out your own cost · See what a plan costs
On one page
Two of the five signs together is the moment. Hand off the recurring work and keep the decisions. Under 30 people in one state, a PEO. Past 60 and hiring steadily, a hire into working systems. In between, and across states, a firm running your own HRIS. Price your own hours before deciding it is cheaper to keep going.
