Human resources departments are critical tools in large organizations, where the volume of staff requires specialized management. They might not be as necessary for a small-business owner. While employing HR specialists can be significantly useful, doing so without carefully considering the drawbacks is a mistake that you and your business cannot afford to make.

Specialized Functions

Having a human resources department brings expertise that your business needs to grow and operate. Recruitment specialists, for example, are trained in interviewing techniques, posting targeted job openings and identifying required talent. Health and safety staff help ensure that your business complies with federal and state wellness standards. Some HR professionals -- such as HR generalists -- can handle a variety of human resources functions, providing oversight to other departments. The HR department is also an effective training tool, designing and implementing effective programs to orient employees and equip them with necessary skills. This allows you to focus on building your business, knowing that all the other internal functions are taken care of.

Addressing Needs

The human resources department can provide a great deal of insight into how your employees perform and think. They understand human needs and can tailor things like benefits, scheduling and vacation time to suit workers. They also provide an important source of support for employees, where they can bring up concerns about issues like workplace conflict, payroll mistakes or safety hazards.

Conflict of Interest

Having a human resources department can be problematic if its direction does not coincide with your own. Despite alleviating the burden of many business functions, relinquishing control of these can cause your company's direction to change. Ideally, all decisions should be a joint effort between business owners and the HR department; however, without a common vision, even collaborative decision making can be time consuming and lead to damaged relations. Some disagreements can include internal versus external hiring, terminations and pay rates.


Perhaps the biggest concerns with having a human resources department -- or the biggest issue in any business -- is cost. Your main goal is to make money, so any costs will reduce your profit. While highly trained HR specialists can be a valuable asset, some of them earn an average of approximately $50,000 per year as of 2010, according to the Bureau of Labor Statistics. This can be a good investment, but resorting to an HR department before business growth warrants will cause substantial, unnecessary expenses.