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The HR dilemma in fast-growing businesses
Business growth brings exciting opportunities, but it also introduces complexities, especially when it comes to supporting your workforce and maintaining a positive employee experience. This is where your HR function comes into play. But does your team have the resources necessary to support a rapidly evolving business?
In 2024, 56% of HR professionals said their department lacked sufficient staff to cover the workload. HR professionals in understaffed departments are more likely than their peers in adequately staffed HR departments to be actively job hunting (34% versus 22%).
Source
HR professionals lacked sufficient staff
Table of contents
Let experience be your guide
As a strategic HR partner to many small and medium-size businesses, Insperity operates on this belief: A well-planned people strategy gives businesses a serious competitive edge in recruitment, retention and growth.
When you’re a small company, you’ve got a lot of boxes to check, and you got a lot of weaknesses. And we leveraged Insperity’s complete solution. And as we grew to a midmarket-size company, we were able to pick and choose the services that we needed.”
Robert AlvarezChief Financial Officer, BigCommerce
Choose your track
Every chapter keeps its tools either way. Quick adds a 30-second gist and skips the deep-dive notes; Deep keeps everything. Switch any time from the top bar.
Your HR function: Is it keeping up with your growth?
Stop what you’re doing, take a moment and really think about your company’s HR. Does it seem to be keeping up with the unique demands of your business? Or does it feel like certain things are falling through the cracks?
When emerging growth companies first hit the ground running, they tend to invest in sales, supply chain, IT and accounting departments – but fail to fully consider HR. This can create challenges later on.
If your HR function is having a hard time keeping up with the pace of change or increasing complexity of your growing business, you risk missing critical opportunities to boost productivity, attract and retain top talent and build a thriving company culture.
Let’s break it down. Traditionally, an HR function is responsible for employee-related administration, hiring, training, performance management, employee relations and employee benefits. When these tasks are done right, they lay the groundwork for a great company culture – but they’re just the beginning.
At the end of the day, your HR function needs to do more than its routine tasks. It needs to help your company reach its strategic goals.
Managing all these duties with a small HR team can quickly lead to burnout and crucial tasks slipping through the cracks. So how do you bolster your HR function to not only adapt to the added responsibilities that come with a growing business but also thrive?
In a survey of middle market companies, 0% of employers said that hitting a higher employee count threshold required hiring additional HR staff, and 0% said that it required them to invest in HR technology to manage the increased complexity.
Building a strategic HR team
Once you become aware of the crucial role HR plays in growing your business, your first thought may be to ramp up your function by hiring a few extra HR generalists and specialists to reach your strategic goals.
But is that really the best recipe for sustained success in a growth environment?
Will you be able to quickly hire enough HR talent to provide the breadth of knowledge and depth of experience that your growing business needs now and in the future?
And what will it cost to recruit, train and maintain these employees?
Additionally, to adequately support the business, larger organizations often divide up their HR functions into specialized areas of focus, such as training and employee education, succession planning, compensation administration and organizational culture development.
If you want to compete with these powerhouse businesses, you’ll likely need to hire a specialist for each focus area.
Insperity has a dedicated division for middle market companies, giving growing businesses access to experts who understand their unique challenges and how to address them.
See what’s possible →Recruiting these functional specialists can be a long, arduous and costly process. And the difficulties can compound when an organization seeks senior HR leaders who can succeed in a growth environment.
Consequently, growing businesses often find themselves feeling stuck – unable to quickly obtain the strategic HR resources they need to move forward. They may also struggle to find specialists who can execute tasks within each functional HR area.
Plus, there are the hidden expenses associated with building an internal HR team.
To estimate how much it costs to build an in-house team, calculate the salary and benefits for each new HR employee you plan to hire. And consider the time you or someone else will spend training them. Also factor in the costs related to housing the function. And be sure to quantify the amounts you’ll still need to maintain and pay for different HR service vendors and technology platforms (e.g., payroll service or software, HRIS system, benefits portal) as well.
Without the right HR specialists, your business risks falling behind in critical areas like talent acquisition, HR compliance and employee engagement, impacting your ability to scale sustainably.
Deep diveTime-to-hire is a cost too
The calculator prices what you pay once people are in their seats. It doesn’t price the months before that, when the work still lands on someone else. Senior HR roles that need growth-stage experience often take a long time to fill, and until they’re filled, founders, finance leads and office managers cover the gap. Estimate that by counting the HR hours your non-HR people spend each week, then multiply by the weeks a search usually runs at your company.
Tapping into the power of a PEO
The combined time, energy and money required to scale HR services and team members often lead many fast-growing businesses to seek more efficient, cost-effective ways to supplement their current HR function.
For many of these businesses, the answer is an HR partner.
And while there are many different kinds of HR providers, are often the best suited for growing businesses.
Provide an established HR infrastructure with proven HR processes, procedures and policies.
Scale HR services up or down quickly as your company evolves.
Handle many tactical functions of HR, freeing up your existing HR team to focus on strategic goals like workforce planning, leadership development and recruitment.
Notify your team about changes to federal and state employment laws and regulations and recommend solutions to help you stay in compliance.
Deliver integrated HR technology that simplifies cumbersome manual processes and enables in-depth reporting on certain employment data.
Provide employees with access to high-quality benefits.
Help improve predictability of HR budgets for employers.
Provide access to a knowledgeable service team of HR specialists who can offer solutions tailored to the challenges of fast-growing businesses.
Offer outcome-based, project-driven consulting services for certain HR issues that support your strategic initiatives, workforce planning, leadership development and recruitment.
A PEO that is used to serving fast-growing businesses has already considered many of your needs and, in certain cases, created related systems to accommodate businesses of your size.
Unfamiliar with PEOs?
PEOs enter into a relationship with your company called “,” which is based on a contractual relationship between your business and a PEO where employer-related responsibilities are allocated between the parties.
Here’s what that means for you:
- Your employees are co-employed by both your company and the PEO.
- The PEO takes responsibility for certain HR tasks, shares some with you and leaves others as your responsibility.
- You keep control of daily business operations.
Which HR functions shift to the PEO is determined by the between you and the PEO.
Now that you better understand the value a PEO can bring to your growing company, let’s take a closer look at the many ways a PEO can help you elevate the way you manage HR.
Transform your approach to HR operations
Once you’ve identified a need to reevaluate your HR, we can start getting into the finer details of making that transformation. First, let’s take a look at HR operations.
The term HR operations can be a big umbrella. It encompasses HR administration along with HR infrastructure, both of which support the delivery of employment-related services and the execution of your people strategy across your organization.
The scope of this concept alone can be enough to leave you feeling overwhelmed, but a PEO can help you implement both HR infrastructure and more efficient ways of managing employment-related administration.
Streamline your HR administration
These days, your HR team likely spends most of its day answering administrative demands. This leaves them with little to no time to work on long-term talent management initiatives (, reducing turnover, compensation analysis, etc.).
Partnering with a PEO gives you access to a team of experienced HR specialists who can help your in-house team handle routine tasks and give them time back to focus on more impactful, strategic work.
PEOs typically will handle leave administration for your employees.
Leaves of absence can be especially challenging and lead to many administrative headaches for your HR function. There are myriad types of leave now available. And with a fortress of laws protecting employees, you have to practice caution to guard against costly litigation should a dispute arise.
Typically when you work with a PEO, its leave administration team will assist you by tracking employees’ leaves and their return to work. Leave administration is particularly valuable if you’re a – this team can help you navigate the state and federal leave laws and regulations in every state where you have employees.
Deep diveWhy multistate leave gets complicated fast
Federal leave law sets a floor, and many states and cities add their own paid sick, family and medical leave programs on top. Each can carry its own eligibility rules, notice periods and payroll contributions. Hire one remote employee in a new state and you can inherit a new set of rules overnight. That’s why tracking leave and return-to-work dates in one place matters more as your map grows.
A nimble, scalable HR infrastructure for today and tomorrow
In your day to day of tackling numerous employment-related administration duties, you and your HR staff may be working with a variety of HR service providers – a benefits broker, payroll processing company, workers’ compensation insurance provider and so forth – to execute routine tasks.
When you add to, subtract from or restructure your workforce, how much time is spent communicating the changes and coordinating services with this complex set of providers?
And what does this complexity mean for the workplace experience and the productivity of your team?
A PEO may be your best choice for a scalable HR infrastructure and services that support your business as it grows and changes.
With a PEO, many of your HR services are under one roof
Scenario from the ebook: you acquire a small complementary business and it brings 20 new employees. Watch the same change move through two setups.
Your in-house HR representative or function collaborates and communicates directly with the PEO’s service team. Many PEOs offer clients a single point of contact, typically an account manager.
When your company needs to make a change, your team will communicate this to your account manager. Your account manager will then convey the information to the appropriate PEO service departments – payroll, employee benefits, workers’ compensation and more – so the necessary adjustments are made to the services your business receives from the PEO.
A PEO can also provide support as your company experiences rapid growth or acquires more personnel through acquisitions. For example, let’s say you decide to acquire a small complementary business, and the acquisition brings 20 new employees. Your HR manager notifies your PEO account manager.
A PEO can simplify HR administration for growing businesses and smooth the often-turbulent acquisition process. From there, your account manager contacts and coordinates with your service team – payroll, employee benefits, employee onboarding, etc. – so that the necessary steps are taken even before your new employees walk through your doors.
Instead of shuffling through paperwork and coordinating with multiple service providers, your PEO can support a smooth employee onboarding experience while your HR team focuses on making the acquisition a strategic and financial success.
Built-in HR compliance confidence
Let’s be real. Navigating HR compliance probably isn’t your idea of fun, but that doesn’t make it any less important.
In fact, one of the biggest mistakes you can make as an employer is to miscalculate the importance of operating within the boundaries set by government regulations and employment laws.
Often businesses don’t know there’s a problem until charges are brought against them. And then it’s too late. One error can lead to costly litigation and fines, not to mention the loss of time and productivity.
A PEO can help your current HR function monitor and prepare for certain federal and state employment laws and regulations that your business must adhere to. The PEO’s HR specialists keep abreast of specific employment laws, and they can collaborate and advise your team on many issues, helping you to maintain employment-related compliance. This way, despite the complexity and volatility of HR administration in today’s world, you have a team of specialists supporting your business.
HR compliance is about a lot more than keeping your business out of trouble, though. A business that takes a strategic approach to its HR compliance can see many benefits, ranging from boosting employee retention to becoming more resilient to change.
Consider your HR compliance efforts, such as developing a robust employee handbook and providing training to employees, as guardrails that will help your business stay on a path toward sustainable growth.
If this seems a bit complex, there’s no need to worry. A PEO, especially one that gives you access to an HR compliance specialist, can often help you bridge the gap between the tactical and the strategic elements of employment-related compliance.
HR tech that scales with your business
Some things simply aren’t designed to grow with you. Think about the first tools you used to build your business. They were probably perfect for getting you off the ground. As your company evolves, however, the very systems that once supported you can begin to hold you back.
A more manual approach to your HR – spreadsheets, disparate tools for your routine tasks, etc. – probably doesn’t suit your business anymore, and that’s OK!
As your company scales, HR technology is no longer an option, it’s a necessity. But how can you tell if you’ve outgrown your existing technology suite?
You could buy a stand-alone system. But then you’re on your own or paying expensive maintenance and support fees.
With a PEO, you have a team of HR technology gurus that is only a phone call away.
Need a custom report? Some PEOs offer specialists who will build and run reports for you. Have questions about payroll data? Call your payroll specialist.
It’s important to note that no two tech platforms are the same. Taking a test drive of a PEO’s HRIS is essential when considering a potential partnership.
Deep diveFive things to try on an HRIS test drive
- Run a mock new hire end to end: offer, onboarding, first paycheck.
- Request a PTO balance as an employee, on your phone.
- Pull a headcount and turnover report without help — then ask support for a custom one and time the reply.
- Ask where policies and handbook acknowledgments live.
- Ask what happens to your data, and your uptime, during upgrades.
The Insperity® HR360 solution runs on our proprietary Insperity Premier™ platform, an intuitive self-service tech system, and the Insperity HRScale™ solution* will give you access to award-winning technology.
* Features of the Insperity HRScale™ solution are subject to change.
A better way to offer employee benefits
The modern employee knows what they want, and they aren’t afraid to seek it out. While this can be a big concern for many businesses, you can turn it into an opportunity.
Offering desirable employee benefits doesn’t just keep your team happy. It also helps your business stay competitive.
But navigating these benefits can be complex. From choosing which types of benefits to offer, finding the right provider, balancing cost and quality, determining employer contributions and administering the benefits to eligible employees, it’s easy to become overwhelmed.
As your business expands, providing these benefits can become even more complicated. More benefits for more people often equal more paperwork, which means less time to focus on other aspects of HR. Fortunately, a PEO can support you through many of these challenges so you’re able to make the right decisions for your growing business.
Employee access to Fortune 500-level benefits
When considering PEOs, it’s essential to look at their approach to benefits. Many PEOs sponsor their own benefit plans that are available to individuals they co-employ through the PEO arrangement. As the plan sponsor, these PEOs are responsible for the administration and management of those benefit plans.
This means your employees can choose from a variety of benefits with no effort required on your part. This also makes it much easier for your employees to have access to nationwide plans; you don’t have to worry about managing that either.
A well-established PEO will have strong and often long-standing relationships with national insurance carriers. In most cases, the PEO will work closely with the insurance carriers to manage the plan and minimize risk and will often have a greater ability to negotiate favorable terms. Thus, the PEO’s plan costs may be lower and more stable than a business would be able to achieve when offering a plan on its own.
Offering enterprise-caliber benefits to employees is essential for attracting and retaining top talent, as it allows your business to compete with bigger companies and boost employee wellbeing (and, therefore, productivity).
In addition, PEOs typically employ internal benefit specialists and third-party consulting firms to negotiate directly with insurance carriers on behalf of the PEO. This helps to ensure the PEO is offering plan designs that meet current market strategies.
What this means to your business …
With a PEO, your employees get cost-effective, comprehensive group health coverage and other benefits from a variety of insurance carriers. And with the PEO handling the benefit plan, you have more time to focus on running your business.
Eliminate the burden of benefits administration
The bigger your business gets, the more people your plans cover and the more HR work is involved in administering benefits, from managing enrollment to negotiating rates with providers.
Can your team handle this influx of work? Maybe, but chances are other projects may be put on the back burner. With many PEOs, the burden of benefits administration no longer falls on your in-house HR team.
Deep diveWhat a plan sponsor actually files
Two items on the plan-sponsor list trip up growing companies. The is an annual report many employee benefit plans must file with the federal government. check that a plan doesn’t unfairly favor highly paid employees. Both take data, deadlines and know-how — which is why moving them to a sponsor frees real time.
When employees have questions or want to make changes to their benefit plan elections, they work with the PEO directly, freeing up your HR team to focus on more strategic efforts. Whether they use that extra time to develop programs for boosting employee engagement or create upskilling plans for your team, the ability to redirect their focus toward initiatives that drive growth and innovation can have a positive impact on your business.
HR cost clarity to build financial confidence
Effectively managing HR costs is essential for businesses striving for sustainable growth.
Many organizations incur a wide range of HR-related expenses – some of which often go unnoticed. These costs extend beyond the obvious, such as administrative staff, HR and payroll systems and benefits administration. They can also include less visible expenses like onboarding processes, HR compliance training, administration, time and attendance tracking software, performance management tools and even the time that non-HR personnel spend handling HR tasks.
In short, HR costs are often spread across multiple areas, making it difficult to identify the full scope and accurately forecast employee-related expenses. Understanding these hidden costs is the first step toward controlling them and improving your bottom line.
By joining a PEO, however, your company can find HR cost clarity and establish budgetary certainty more effectively. This is all thanks to the co-employment relationship you have with the PEO.
As previously discussed, in the co-employment relationship, the PEO is typically the for designated HR responsibilities – such as benefits sponsorship, workers’ compensation administration and payroll processing, withholding and reporting. You typically pay one comprehensive fee for all services provided by the PEO.
Having clarity into costs gives you the power to create more accurate financial forecasts for your business, allowing you to better anticipate and allocate resources. This level of precision not only helps you avoid unexpected financial strain but also offers opportunities for cost savings or reallocation of funds to other strategic priorities.
In the long run, this improved financial visibility can lead to more stable operating results, enabling your business to weather economic fluctuations with greater confidence – a welcome relief in both ordinary and challenging times.
Elevate the employee experience
At the end of the day, it’s easy to get caught up in metrics of success like revenue, customer acquisition and market share, but do you know how satisfied your employees are? While it is much harder to quantify, it’s just as important.
Employee experience is the true driver of long-term scale.
A company with poor employee experience will have difficulty retaining its team members, leaving the recruiting team to work overtime to fill rapidly emptying roles. The business will spend most of its time and effort trying to maintain a sense of stasis, leaving growth a far-off dream.
However, creating a retention-supporting employee experience is complex. You have to consider how every part of your HR – compliance, operations, benefits and tech – impacts your team.
For example, if an employee has a question about their PTO, do they have to contact an HR team member and wait for a response, or can they log in to an online portal and get their answer immediately? Or perhaps an unclear employee handbook leads to confusion about the expectations set for your team, which can quickly morph into discontent.
Businesses with a supportive company culture are
more likely to improve employee retention
more likely to have productivity improvements
Source
Today’s employees are motivated by flexibility, purpose and a genuine commitment to their wellbeing. Offering a competitive salary and standard benefits is no longer enough – employees now seek an experience that fosters their growth and fulfillment.
However, an HR team bogged down by routine employment tasks often lacks the bandwidth to focus on initiatives that truly elevate the employee experience.
A PEO can help you adopt a holistic approach to achieving a great company culture, providing strategic guidance and giving your team access to the resources they need to thrive.
Plus, many PEOs offer tools, like an online portal or a call center, to help your employees manage much of their employment-related information and find answers to questions. Giving your team 24/7 access to their HR details can boost satisfaction and reduce the burden on your in-house HR function.
Strategic HR guidance
Managing your HR function can often feel like a balancing act. You have to make sure you’re addressing your HR compliance, employees’ needs, routine tasks and everything in between. Then combine that with the need to take a strategic approach in addition to your tactical HR, and it might feel like things will topple.
With all these demands, it may seem easier to focus just on the quick wins when managing HR, but companies that have a growth mindset also need to focus on the long-term initiatives that will yield sustainable advantages.
However, small HR teams might not have the expertise needed to develop these plans. That’s where a PEO can step in. A PEO can connect you with subject matter experts who have years of experience in crafting and implementing HR strategies, enabling you to bypass trial and error and get straight to achieving results.
The Insperity® HR360 solution and Insperity HRScale™ solution* are backed by a knowledgeable service team with experience in multiple areas, including employer-related issues and workforce management.
* Features of the Insperity HRScale™ solution are subject to change.
grow twice as fast
lower employee turnover
less likely to go out of business
Five questions to lock in the blueprint
Ready to level up your HR strategy?
Your business is growing, but is your HR keeping pace? Meet the Insperity HRScale™ solution* – a full-service HR offering. Enterprise-level HR tech powered by Workday. Award-winning HR support from Insperity. Experience true HR adaptability.
What Insperity HRScale helps you do:
- Recruit and onboard great people
- Understand your HR-related expenses
- Lighten your daily HR admin load
- Manage employer-related compliance
- Make data-backed decisions for your business
* Features of the Insperity HRScale™ solution are subject to change.
Get HR that grows with your business.
Built from your answers
Still puzzled by PEOs?
The professional employer organization (PEO) option is a fundamental part of HR outsourcing. So why is it so complicated? See how a team of office workers breaks through the confusion to understand how PEOs can offer their business the right balance of strategy and support.
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About Insperity
At Insperity, it’s not just HR outsourcing, it’s HR that makes a difference.® Our comprehensive HR solutions offer an optimal blend of service and technology to facilitate growth by streamlining processes related to payroll, benefits, talent management and HR compliance. We provide the tools to help you lighten your administrative load, maximize productivity and manage HR-related risks, so you can focus on growth. Because that’s what it means to have a true HR partner.
Our mission is to help businesses succeed so communities prosper
Sources
- Society for Human Resources Management, State of the Workplace Report 2025
- Lighthouse Research & Advisory, 2024
- Insperity Service Operations, 2024
- Lighthouse Research and Advisory, 2025
- Insperity Contact Center, 2024
- National Association of Professional Employer Organizations, 2025
HR for growth · Interactive edition · BNA-G0726-0919
Interactive edition by Studio Vektor