We spend a lot of time in interviews with growing companies, and we keep hearing the same thing. The people function is staffed for a world that no longer exists. Full-time roles built around manual, repeatable work, work that can now be done faster with fewer people and better tools.
That is not a critique of the people in those seats. Most of them are talented and working hard. It is a critique of the model. Companies are paying for 40 to 60 hours a week of capacity and using a fraction of it. The rest is idle headcount dressed up as a job.
The shift back to outsourced people operations
For a while, the trend moved the other way. As companies grew, they brought everything in house. A People team of four, five, six. Each layer added cost, coordination, and complexity. The function got heavier without clearly getting better.
That pendulum is swinging back. Payroll, benefits administration, compliance, onboarding, performance, employee relations. These are exactly the back-office operations companies used to outsource. The difference now is that AI and better software have collapsed how much labor each one actually takes. You do not need a full department to keep them running. You need the right experience, the right systems, and a fraction of the hours.
You are not paying for a team. You are paying for the work to be done.
What we actually see inside companies
When we sit in on a team, the pattern is remarkably consistent. A few people carry the real load. The rest of the headcount is insurance against a busy week that rarely arrives. Decisions get slower because they pass through more people. Policy gets heavier because everyone adds a layer. The org chart grows to justify itself.
- HR work that one experienced operator could run is split across several full-time roles.
- Managers route every people question through HR because no one is sure who owns what.
- A tool was bought, then a person was hired to manage the tool, then a second person to manage the first.
- Compliance is covered many times over, while the day-to-day employee experience gets little attention.
The honest version of the cost question
Here is the uncomfortable part. A full-time People team for a growing company is expensive. Salary, benefits, taxes, the systems each role needs, the overhead of coordination. It is often the most expensive way to get a middling result, because the workload simply does not require that many people on the clock at once.
We are not arguing that you should never hire HR internally. We are arguing that you should hire against the actual work, not against an org-chart template. For most growing companies, the people function can be run end to end by an experienced, embedded team for a fraction of what a full department costs, with better coverage and less idle time.
What running it end to end actually means
This is the part that matters, so we will be specific. We are not a consultant who hands you a roadmap and leaves. For most growing companies, we can run the people function as if it were ours.
- Onboarding, offboarding, and every employee change in between.
- Policy, handbooks, and multi-state compliance.
- Payroll and benefits coordination, and the vendor decisions around them.
- Employee relations, investigations, and the confidential calls leadership should not make alone.
- Performance cycles, manager support, and the people situations that do not have an obvious answer.
- The systems and records behind all of it, so nothing lives only in someone's inbox.
Same people every week. Embedded in your team. The hours flex with what is actually happening that month. A quiet month costs less attention than a hard one.
The right question is not how many HR people you should hire. It is how much of the work actually needs to be on your payroll.
Where the line actually is
We are not claiming one fractional team can replace every people function at every size. There is a point where volume genuinely demands dedicated internal headcount. A 500-person company operating across many regions, with high-volume recruiting and complex employee relations, is a different problem.
But most companies are not there. Most companies we meet have 15, 30, maybe 50 people and a people function that is either overstretched or overstaffed. For that range, carrying a full internal HR department is paying for capacity you will rarely use.
What we would do
If you are not sure which side of that line you are on, start with an honest look at the work. What is actually happening each week. What each role genuinely owns. Where the idle hours are. Then staff against the work, not the template.
That is the conversation we are happy to have. No pitch deck. Just a real look at what your people function needs to do, and whether it needs a full team to do it.