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Leadership Decisions Series #5

“We can do this ourselves”

And for a while, we probably can: someone writes the job description, the founder interviews candidates, finance manages payroll, managers look after their teams, contracts come from an external provider, people questions are dealt with as they arise. In a small business, that can be perfectly appropriate. Resources are limited and investment naturally goes towards product, delivery, customers and business development. A dedicated HR role can feel like something for later, when the company is bigger.

The question is: when does doing it ourselves stop being the best decision for the business?

There is no employee number that provides the answer. A relatively stable company with 40 employees may have very different needs from a 15-person business preparing to hire another 20, enter a new country or build its first management layer. Headcount tells us how many people we have, it doesn't tell us the complexity of the people decisions we are making.

One of the first signals can be capacity: recruitment takes more time, managers bring more questions, someone needs to think about onboarding, salary conversations become more frequent, performance issues need attention, employment requirements become more complex. The leadership team may still be perfectly capable of dealing with each of these things, but being capable of doing something doesn't necessarily mean we should continue doing it ourselves.

Every hour a founder spends coordinating recruitment, resolving a management issue or researching a People question is an hour that cannot be spent elsewhere. At some point, the question is no longer “can we do this?” but *“is this still the best use of our capacity?”

Complexity is another signal: When we hire occasionally, recruitment can remain relatively informal. When several roles need filling simultaneously, we need to think about workforce requirements, candidate experience, assessment, compensation, onboarding and whether we are actually bringing in the capabilities the next stage requires.

The same happens with management: When everyone reports to a founder, People decisions remain concentrated. As managers appear, they need clarity, support and enough consistency to lead their teams. Otherwise, every difficult question simply travels back upwards.

And then there is consistency: Individual decisions made during the early stages gradually become an organisational reality. One person negotiated a higher salary when funding became available, another received a different title to secure the hire, one manager handles progression differently from another, a benefit offered to attract a particular candidate becomes something others begin asking about. None of those decisions may have been wrong when they were made, but as the organisation grows, employees start experiencing them collectively. What once looked like flexibility can begin to feel like inconsistency.

Culture changes too: When a company is small, culture can travel through proximity. People work closely with the founders, behaviours are observed directly and expectations are often understood without being written down. Growth weakens that proximity. New employees join who did not experience the early company, managers begin shaping the experience of people the founders may rarely work with. Recruitment, onboarding, progression, reward and performance all start communicating what the organisation values, whether we have designed them to or not. This is often where the People reality stops being a collection of administrative activities and starts becoming an organisational capability.

Here’s the shift: the first People role should not be triggered by headcount alone, it should be triggered by what the organisation now needs to manage well. And even then, the answer is not automatically “hire a Head of People”, the business may need recruitment capability because hiring is accelerating, it may need operational support because administration is consuming capacity, managers may need guidance, the organisation may need help structuring reward, defining roles, developing its culture or preparing for international growth. Those needs require different levels of experience and different kinds of People expertise.

Sometimes the right answer will be a permanent People hire, other times the capability can remain within the leadership team with specialist support, or it may make more sense to bring in fractional, external or project-based expertise until the need becomes large or consistent enough to build internally. The first decision, therefore, isn't necessarily "who should we hire?", but "what People capability does our next stage of growth require?", because People challenges often become visible after the business decision that created them.

We win the work before realising we don't have enough people to deliver it, we accelerate hiring before recognising that our recruitment process cannot support the volume, we promote employees before building management capability, we expand before understanding whether our ways of working will scale with us.

Waiting until those problems become obvious is one way to determine that People support is needed, but it isn't the only way. A good time to think about People capability is when the organisation can still design for what comes next, rather than only repair what growth has already exposed.