This post is part of a quick answer series that arises from questions on Quora. People are hungry for information and guidance on HR, so I will share some of that here on the Solve HR Blog as well.
Should businesses just get rid of HR? After all, it costs money, and the benefits aren't always obvious, especially if HR isn't being effective and isn't aligned with organizational goals. If a business has an understanding of what HR can do to make it successful, it won’t choose to dispense with HR altogether. Unfortunately, HR doesn’t always make it clear what value they offer to the organization. HR leaders must be business leaders first, always focused on the strategic plan of the organization, and offer real data to support the return on investment for funding HR services.
There are always transactional and tactical activities that have to be performed by someone in the company if there is no HR. (Often these activities get dumped on finance or operations, or inexperienced administrative staff, not always with the best results). Even when using an automated HR technology platform or a PEO, every organization will need someone to assist with issues that arise that aren’t handled by these tools.
For a business that is over the 50 employee mark in the U.S. (a point at which legal compliance and employee relations complexity increase and per employee HR costs begin to make business sense), I always recommend either an experienced HR leader be made part of their core team, or a consultant be available on demand to plan people needs proactively, avert unnecessary risk, and consult with business leaders to make the organization more successful.
In short, companies can go without HR, but not if they expect to be competitive.