The six duties that exist anyway
Strip HR to what the law and the work require and six duties remain: hiring and its records, pay administered correctly and on time, required policies and postings, the employee file, performance conversations that leave a trace, and exits done cleanly. Everything else, culture programs, engagement platforms, perk architecture, is optional at this scale. These six are not.
Naming them matters because unowned duties are performed by accident, and HR accidents arrive with interest: a missed filing, an undocumented warning, an offer letter that promised something payroll never knew about.
One owner, a rhythm, and paper
The model that works is one accountable owner, usually the founder or the operations person, a monthly rhythm, and a bias to writing things down the day they happen. The monthly hour covers: anything due on the compliance calendar, any open hiring, any conversation that needs to stop being informal, and the file check that new documents landed where they belong.
The bar is not corporate polish. The bar is that any question about any person, what were they promised, when were they told, what did we agree, can be answered from paper in five minutes.
The annual calendar
HR at this scale is seasonal: January for payroll-year paperwork and comp decisions, mid-year for a light review cycle, renewal dates for insurance and any required trainings, plus each state’s own postings and filings. An hour spent listing your dates once turns the year from ambush into checklist.
Put the people dates on the same calendar as the money dates. Most of them, raises, insurance, bonuses, are both.
What to outsource, what to keep
Rent the mechanical layers: payroll processing, benefits brokerage where you offer them, and an employment-law checkup for your policies once a year or at each threshold you cross. Keep the human layers: hiring judgment, reviews, hard conversations and exits. Vendors are good at compliance mechanics and bad at your people, and the expensive HR failures are all in the second category.
Company crossing twenty people and multiple states? That is when the function starts deserving dedicated ownership, and when enterprise-grade advisory enters the picture.
A desk instead of a department
The HR Desk is the one-owner model, prebuilt: applicant intake, the organization record, employee files, onboarding tasks, reviews, surveys and approvals in one place, with Velora drafting the documents so the writing-it-down actually happens.
The money half of every people decision, cost, budget, raise math, lives next door in the Finance Desk, and this section’s people budget guide connects the two.
Frequently asked questions
Does a small business need an HR department?
It needs the function, not the department: six duties, hiring records, correct pay, required policies, employee files, documented performance conversations and clean exits, carried by one owner in a few hours a month.
What HR tasks should a small company outsource?
The mechanical layers: payroll processing, benefits brokerage, and an annual employment-law checkup. Keep hiring judgment, reviews, hard conversations and exits in-house, because vendors cannot know your people.
When does a company need dedicated HR?
Commonly around twenty people or multi-state complexity, when the six duties stop fitting in a monthly hour and the compliance surface widens.