As businesses grow, their human resource needs become considerably more complicated, nuanced, and expansive. Functions that may have been treated as an afterthought during the startup or founding phase morph into critical elements of future success when you start competing against major players in the marketplace.
So, if you’re growing, it’s worth ensuring that your HR function is growing with you. Ask yourself the following questions: Are your policies scalable? Can your HR systems handle the complexities of managing 50, 100, or even 200 employees, much less a workforce of thousands? Would your compliance practices pass an audit tomorrow in all the jurisdictions within which you operate? Do you know how to make an effective plan for outsourcing HR to compensate for gaps while maximizing internal capabilities and resources?
If your business is growing, first — congratulations! You're beating the odds. Half (50%) of small businesses fail within five years, and two-thirds (65%) within 10 years. It's an intensely competitive world, and any organization expanding its customer base and revenue is doing better than most.
But expansion inevitably brings HR-related challenges, many of which growing organizations aren’t truly prepared for.
For example, did you know that the per-capita HR staffing rate changes as organizations grow? According to a study from jobsite Indeed, small organizations tend to have higher ratios (3.4 HR staff per 100 employees). As organizations scale, that ratio drops (to about 1.22 HR staff per 100 employees for midsize companies or 1.03 for enterprises). In some ways, that’s good news: you don’t need to grow your HR team at the same rate as your overall headcount.
But often the reason is because larger organizations have access to a greater array of more sophisticated tools, technologies, and outside vendors so that they can staff disproportionately less for HR even while managing ever larger HR challenges. Even more fundamentally, they have an effective and clear human resource strategy to follow. Otherwise, it means your existing HR team will face a dramatically heavier — and thornier — workload. Growth increases legal and compliance requirements, hiring demands, payroll complexity, and employee relations issues.
Indeed, organizational change, especially rapid growth, can be challenging for employees, resulting in serious change fatigue. Nearly half (45%) of workers report feeling burned out by organizational change. In turn, fewer than half (43%) of employees experiencing change fatigue plan to stay with their employer. “Organizations can no longer afford to ignore change fatigue,” warns Andy Karr, vice president in the Gartner HR practice. “In today’s workplace, employees now experience multiple, stacked changes that lead to burn out.”
That’s especially true at organizations that are growing fast.
In other words: your business might be booming, but if your HR operations aren’t ready to support you and you don’t have a business growth plan, you could see performance dip and turnover spike. HR is never more important than during a growth phase.
And HR can definitively improve turnover and retention rates through a variety of mechanisms. Consider how an organization handles onboarding. Typically, one out of every three new employees leaves within 90 days, but strong onboarding programs can flip the script. In fact, over two-thirds (69%) of employees who have a great onboarding experience are more likely to stay with a company for the next three years.
All of this is just the tip of the iceberg. Growth is great, but it's also incredibly challenging, especially from an HR perspective. That’s why you need to make sure your HR team and their overarching human resource strategy are ready and prepared.
Our The HR Readiness Checklist is a free, easy-to-use, no-obligation tool designed to help you audit your own HR practices and prepare for sustainable growth. Covering critical areas like compliance, hiring, payroll, benefits, and employee development, our checklist is built to support your business growth plan and ensure your human resource strategy is ready for what's ahead in all key areas, including those many businesses tend to overlook.
Strategy & Compliance: Are your HR policies documented and legally compliant? Are you conducting regular internal audits to stay ahead of regulatory changes? Good compliance yields real dividends, helping you maintain operational continuity, avoid unnecessary costs, and even improve competitive posture.
Workforce Planning & Talent Acquisition: Do you have clear job descriptions and a recruitment strategy aligned with your growth goals? Strong recruitment practices help you attract top talent, onboard them faster, and perhaps most importantly lower hiring costs.
Compensation and Benefits: Are your pay practices transparent and competitive? Are you remaining compliant with wage laws and leave policies? Especially in a volatile market, building compensation packages that attract the right talent without overspending is critical.
Employee Classification & Terminations: Are you correctly classifying employees (exempt vs. non-exempt) and conducting lawful, respectful offboarding? Misclassification alone can lead to multimillion dollar payouts, and it’s a persistently tricky area to manage.
And More: Our checklist covers much more, from career development pathways to creating safe, inclusive, and compliant workplaces.
Ready to find out where you stand — and how to strengthen your HR foundation? Download The HR Readiness Checklist today. It’s free, practical, and packed with expert-backed insights to power your next phase of growth. It’s more than a "to-do" list. It’s a strategic blueprint for building HR operations that support, protect, and accelerate your business growth.
CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. Learn more at https://www.coadvantage.com/.
**The information provided on this website is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and completeness of the information, we make no guarantees about its correctness, completeness, or applicability to your specific circumstances. Laws and regulations are subject to change, and you should consult a qualified legal professional before making any decisions based on the information provided here.