When to Use Fractional HR vs. Hiring a Full-Time CHRO: A Growth Guide for Startups
Following my post on LinkedIn, I would like to share more detailed article about scaling up Talent Acquisition and HR operations at Startups and Scale Ups.
Scaling a startup comes with unique challenges, especially when it comes to managing people operations. Deciding when to introduce dedicated HR leadership, such as a Head of Talent or a Chief Human Resources Officer (CHRO), can significantly impact growth.
While large organizations often have full-time HR executives from the start, early-stage companies often benefit from flexible HR roles that adapt as they expand. Here’s a guide to help founders understand the HR support needs for each growth phase and when it makes sense to move toward a full-time HR leader. I also recommend you to read our article about From Startup to Unicorn: How Corporate Culture and Talent Acquisition Evolve Together
Focus: Building initial culture, hiring foundational team members, establishing basic HR compliance
At this stage, founders are directly responsible for creating the initial team culture, core values, and overseeing the first hires. Rather than bringing on a full-time HR leader, founders often leverage fractional HR support to cover essentials like setting up policies, onboarding new hires, and basic compliance. This allows founders to remain hands-on in shaping the company's identity without the need for a full-time HR hire.
Why Founder-Led Works Here
With fewer than ten employees, people operations remain relatively straightforward, enabling founders to stay closely involved. Bringing in occasional HR assistance as needed can streamline hiring and setup for compliance, allowing founders to focus on growth rather than getting bogged down in HR tasks. Fractional HR support can also assist with implementing simple HR processes that help pave the way for future scalability.
As your team grows to around 10-25 employees, HR needs expand. This stage requires additional focus on onboarding new hires, maintaining compliance, and handling administrative tasks. A fractional HR coordinator, who works on an as-needed basis, can handle these tasks efficiently and keep your HR processes organized without requiring a full-time position.
Bringing in a part-time HR coordinator relieves founders and managers of repetitive administrative responsibilities. Tasks such as onboarding, benefits enrollment, and payroll support are managed with more structure. Fractional HR support also ensures you stay aligned with employment laws, avoiding compliance issues while fostering a positive onboarding experience for new team members.
Phase 3: Fractional People Operations Manager (25-50 Employees)
Role: Part-time People Operations Manager
Focus: Strengthening culture, implementing performance feedback, starting learning and development initiatives
Around the 25-50 employee mark, rapid growth can introduce challenges around maintaining a cohesive culture. A fractional People Operations Manager provides a solution by working on culture reinforcement, performance feedback, and beginning to introduce learning and development (L&D) resources. Their role helps maintain alignment as the company expands, providing structured support without committing to a full-time hire.
With a dedicated manager in people operations, startups can establish vital feedback channels, define performance expectations, and develop early-stage L&D programs.
A fractional manager helps instill consistency, keeping the team aligned with company values. This level of involvement supports growth and strengthens employee engagement, setting the stage for scaling effectively.
Phase 4: Fractional Head of People (50-100 Employees)
Role: Part-time Head of People
Focus: Overseeing talent management, engaging employees, partnering with leadership
As your company reaches 50-100 employees, people-related responsibilities become more complex and strategic. A fractional Head of People can oversee talent management, create programs that enhance employee engagement, and partner with leadership to align HR practices with broader business goals.
This strategic focus helps bridge the gap between HR and company leadership, without the need for a full-time executive.
Retaining top talent and fostering a unified culture becomes more challenging as the team grows. A fractional Head of People can provide the expertise to introduce engagement initiatives, scalable hiring frameworks, and programs that reinforce the company’s mission. This role allows the company to manage HR needs strategically and effectively, making it easier to attract and retain talent aligned with company goals.
Phase 5: Full-Time CHRO (100+ Employees)
Role: Full-time CHRO or Head of People
Focus: Building a long-term people strategy, optimizing HR functions, and developing retention plans
Once a company surpasses 100 employees, the people operations demands tend to justify a full-time HR leader, such as a CHRO. At this level, HR leadership moves from operational support to strategic influence, focusing on long-term people strategy, setting up structures to sustain growth, and implementing programs to retain talent.
A full-time CHRO can streamline HR functions, from recruitment and employee development to compliance and succession planning, aligning the team’s direction with the company’s vision.
Why a Full-Time CHRO is Critical at This Stage
With a full-time CHRO, the company gains a leader dedicated to tackling complex HR challenges and ensuring all HR functions are optimized for growth. This role shifts the focus from operational HR tasks to driving initiatives that are strategically aligned with business goals. A CHRO helps maintain organizational consistency and productivity, ultimately supporting the company’s ability to scale smoothly.
Fractional HR is a highly effective solution for growing companies, providing expert support and flexibility without the cost of a full-time role. This approach enables startups to access critical HR functions tailored to their current stage, allowing founders to manage resources effectively while still prioritizing people management.
Fractional HR allows companies to grow with confidence, building a solid foundation for future success without overextending their budgets.
Conclusion: Growing HR Support with Your Startup
Choosing the right HR role at the right time can enhance a startup’s ability to scale sustainably. By gradually introducing fractional HR support and then transitioning to a full-time CHRO, startups can maintain a high-performing culture, attract top talent, and align HR practices with long-term goals. Ultimately, a well-timed HR strategy is an investment in a thriving, resilient organization, ready to navigate the challenges and opportunities of growth.
UnitiQ: The Smart HR Solution for Scaling Startups
UnitiQ offers a quickly scalable approach to HR, designed for startups and fast-growing companies that need expert HR support without the costs of a full-time hire.
By providing fractional HR services - specialized, on-demand HR expertise - UnitiQ helps businesses tackle their people challenges exactly when and where it’s needed.
Startups often struggle to balance rapid hiring, culture-building, and compliance, and UnitiQ’s flexible model allows founders to access seasoned HR professionals who bring immediate value.
From talent acquisition to establishing people strategies, UnitiQ aligns its services with each stage of growth, ensuring that HR evolves alongside the business.
With UnitiQ, startups can focus on growth while maintaining a strong, cohesive team and a vibrant company culture.
We are happy to help you with Talent Acquisition and HR tasks, please contact me, Olga Fedoseeva, Founder at UnitiQ, directly: My Telegram My LinkedIn