Search for “how to hire your first HR manager,” and you’ll find countless guides explaining the different types of hiring managers, how to write the perfect job description, and what interview questions to ask. These resources are helpful — but they all assume one thing: that hiring a full-time human resources manager is the right choice for your business.
For most small and medium-sized businesses, that assumption doesn’t hold up. A traditional human resources hire likely won’t align with your needs, your budget, or your growth stage. There’s another option that offers greater flexibility, expertise, and results: fractional HR.
Instead of relying on a single hire, fractional HR delivers senior-level support and proven strategies tailored to your business — without the full-time cost or commitment. Let’s explore why fractional HR might be the smarter choice than an internal hire, plus when it’s the right time to bring on HR help.
3 Clear Signs It’s Time To Bring In Professional HR Support
Recognizing the right time to invest in HR support can be challenging. Some HR-related problems may already exist, but they’re difficult to spot without expertise. You might notice symptoms — like disengaged employees or a lack of growth — without realizing they can be solved with HR.
Here are three signs it’s time to bring in professional HR help.
1. You’ve Hit the Headcount Tipping Point
The average client that hires Castle HR for fractional support is a business with 29 employees.
At this size, effectively managing a growing team becomes overwhelming for CEOs who are already stretched thin. Performance management is ad-hoc, and training and development programs fall by the wayside.
When these challenges go unaddressed, the consequences can quickly pile up:
- Burnout. Leaders become so bogged down with operational issues that they lose focus on strategic priorities.
- Reduced performance. Without effective HR processes, employees become disengaged and misaligned with their roles, leading to inefficiency and lower overall productivity.
- Employee turnover. When you don’t have retention strategies to keep top talent you pay the price with frequent departures and the high costs of hiring and onboarding replacements.
The ideal time to bring in HR support is before these problems arise. Acting early ensures smoother operations, a stronger team, and better outcomes for your business.
2. Legal Requirements Are Mounting
Companies must comply with employment laws that cover areas like workplace safety and fair wages. In Canada, the penalties for violation of the Canada Labour Code and related legislation become more substantial as your business grows — making non-compliance riskier the larger your company.
Failure to comply with regulations results in consequences, including prosecutions, fines, and the public naming of non-compliant employers. Fines range from $50,000 for the first offence to $250,000 for the third (and subsequent) offences.
You need HR expertise and initiatives to stay compliant. HR professionals help you to ensure your employment terms and wages meet legal standards, maintain proper records, and implement effective workplace health and safety measures. They also monitor evolving regulations so your company stays ahead of compliance requirements.
3. You Want to Grow
According to the Harvard Business Review’s five stages of small business growth, stage three is where companies face a critical choice: plateau or grow. At this stage, the dynamics of success shift. Your business can no longer rely on founder-driven operations or early-stage tactics. Instead, strategic planning, delegation, and the strength of your team become the backbone of continued growth.
[Caption: This graph is inspired by Exhibit 5: Management factors and the stages in the HBR model]
To build and maintain a high-performing team, strong HR practices are essential. Strategic HR enables you to attract superstar talent, onboard new hires properly, and retain top performance, which drives business performance.
Why Fractional HR Is Better Than Hiring an Internal HR Manager
When it’s time to invest in HR, you have the choice between hiring an internal HR manager or opting for fractional HR services. Fractional HR provides a distinct advantage, offering experienced professionals, cost savings, and expertise that initial internal hires often can’t match.
Experience and Strategic Support
Budget constraints mean companies have to choose a junior-level professional as their first HR hire. Without years of experience solving HR problems, those individuals won’t be able to give you the strategic advice necessary to drive growth.
In contrast, choosing fractional HR with Castle HR gives you access to senior-level experts. With an average of 15.9 years of experience per team member, Castle HR professionals come armed with proven playbooks from decades in the HR trenches.
Cost-Effective
Hiring an internal HR manager comes with high costs, including salaries and benefits. Fractional HR offers a more cost-effective alternative. With Castle HR, companies gain access to seasoned HR professionals for 60% less than the cost of hiring a generalist — all without the need for a full-time commitment.
A fractional arrangement also means we can scale up with you. That way, you have the right level of support at every stage of growth.
Integrated Team, Broader Expertise
An internal HR hire, while dedicated, will typically work in isolation, especially at the start. Without access to broader expertise, their ability to address complex challenges or scale with your business can be limited.
Another option you might consider is outsourced HR consulting. While it may seem convenient, outsourced HR often falls short. Outsourced professionals are not embedded in your team, which can lead to generic solutions that fail to reflect your company’s unique challenges. Additionally, outsourced HR tends to be reactive, solving problems as they arise but rarely focusing on long-term prevention.
Castle HR takes a different approach. As a fractional HR partner, we embed directly into your team and work to understand your specific needs and challenges. Our professionals craft tailored strategies to support your business goals and solve your HR issues. Plus, with access to the collective expertise of our team, you get quality HR support, backed by years of proven experience and success.
Learn more about the difference between outsourced HR consulting and fractional HR.
See Fractional HR In Action: Real Businesses, Real Results
At Castle HR, we partner with businesses to solve their most pressing HR challenges. From improving compliance and reducing legal risks to streamlining HR processes with cutting-edge technology, our team helps companies build stronger cultures, retain top talent, and foster growth. Having worked with over 150 companies, we’ve seen firsthand how the right HR strategies can transform businesses.
Let’s have a closer look at two examples.
Save on Staff Turnover Costs
Property Vista was facing high staff turnover, which disrupted daily operations, hurt morale, and inflated costs. Castle HR stepped in to realign roles with company culture and introduce a values-based hiring approach. As a result, staff turnover decreased significantly and their Employee Net Promoter Score (eNPS) rose from the 20s to over 70. The company saved hundreds of thousands of dollars in turnover-related costs.
Read more about Property Vista’s HR transformation.
Hire an All-Star Team
Black Professionals Tech Network faced a common hiring challenge: a flood of applications that often lacked the quality they needed, leaving the team overwhelmed and still struggling to fill vacancies. Castle HR stepped in to streamline their recruitment process. We revamped job postings to clearly define expectations and values and implemented a values-based hiring process.
As a result, BPTN saw a significant increase in applicant quality alongside a decrease in overall volume. This allowed the team to spend less time reviewing resumes and interviewing poor-fit candidates. They also successfully filled an important vacancy with a stand-out hire who exceeded expectations.
Get Unlimited Expertise with Castle HR
A full-time HR manager offers one perspective, but fractional HR gives you access to an entire team of seasoned professionals. Whether you need to streamline onboarding, attract top talent, or build a thriving workplace culture, Castle HR delivers the expertise and tools to help you achieve your goals. Book a call with Castle HR today for an introduction to modern fractional HR.
