Why Growing Companies Need HR in the C-Suite


Why Growing Companies Need HR in the C-Suite

Companies bring in HR personnel at varying stages of growth. Why does the timing matter? Look no further than companies like Uber and Thinx, which faced public backlash for their difficulty maintaining a sustainable company culture at scale. Entry and mid-level HR professionals ensure that payroll is running, employees have ample benefits, and there is someone to go to with questions, but senior HR leadership can help push HR strategy far beyond the basics.


In our analysis of over 1,000 mid-sized companies, we discovered that very few have senior HR leadership. In fact, only 7% of mid-sized companies have a Chief-level HR person. It makes sense for smaller companies to have smaller (or even one-person) HR teams, but it’s imperative that HR has a seat at the table when it comes to driving the business forward. Here’s why growing companies should consider hiring an HR executive early on:

 


Strong Foundation


According to our analysis, most mid-sized companies wait to invest in HR leadership until the company has grown to a certain headcount. The median size of companies with a C-level HR role is 277 employees. But 300 employees is late in the game to establish a clear vision of overall company culture and values.


If companies decide to hire HR leadership to troubleshoot problems or because of a toxic work environment, the new HR executive will have to spend valuable time doing damage control, instead of focusing on forward-looking initiatives. With early HR leadership in place, companies can lay a strong foundation for scalable growth.

 


Employee Happiness


Companies who bring on HR leadership are likely to put a stronger emphasis on employee engagement as they scale. While it may be necessary for a growing business to ramp up areas like technology and sales first, good leaders know that it’s impossible to sell a product without a sustainable work culture. A toxic work environment typically leads to high turnover and as a result, decreased productivity.


We found that the average Glassdoor rating of companies with a C-level HR hire is 3.84, which is noticeably higher than the overall average of 3.3. The proof is in the numbers—increased employee satisfaction at companies with HR leadership is tangible compared to those without a C-level HR employee.

 


Employer Branding


While an HR leader may not be the first hire, this role is essential for building a strong employer brand. Having a clearly defined set of values equips companies with a strong pipeline to attract and retain talent. This becomes particularly important during periods of high growth. So often companies find themselves in desperate need of additional support and are quick to hire employees at mass without proper screening. Though this may work in a pinch, a hiring sprint is typically followed by a realization that many new hires do not align with the company’s core values.


Ultimately, this scenario just results in more work to rebuild the workforce—work that could have been avoided had candidates been selected more thoughtfully. An HR executive is positioned to develop the employer brand and values in advance of a high growth period, so that there is a process in place when the time comes. Though it may seem too early to start thinking about branding, in the long run you’ll be thankful you brought someone on ahead of the rush.


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