Have you ever used a consultant, or started to, then decided to hire someone instead? How did you make the decision that the person you were hiring was good enough? What did you gain or lose in that decision?

As an HR consultant, I run across companies that decide it's more cost effective to hire an employee to manage their HR rather than hire a consultant. It usually turns out that the employee is a "combo" person … someone who wears several different hats because the company is too small to have enough need in any of the areas covered. The combo person may have several titles depending upon what they happen to be doing at that moment, such as Office Manager-Executive Assistant-HR Manager. I'm all for the combo person. In fact, it's often a necessity in a small business to have multi-talented, multi-tasking people.

When it comes to HR, the combo person is typically who I would train to handle the day-to-day routine things. This includes the hiring paperwork, time off or time card paperwork, and other items that are the black and white areas of HR related to basic compliance with the employment laws and regulations. These things can be taught and systemized so others can repeat it whenever needed.

The problem comes in when the business assumes this combo person knows as much as people who have specialized in that particular field for years. The gray areas of HR, at least in California and probably in most states, need to be managed by someone with the knowledge and experience obtained through practice over the years. Often the gray areas are decided as much by the courts as they are by the laws. Simply following the law may not save you in court. Juries have a different view of the law and you have to recognize that when managing HR issues.

If you have grown enough to need someone to handle your basic HR compliance, go for it. Don't give the person the title of HR Manager, though, because the duties are closer to an HR Representative. Save the manager title until the work and person deserve it. Then also hire an HR consultant to make sure that person knows what they are doing. Also get advice from the consultant whenever you have employee issues beyond the very basics. How things are handled when problems arise can play a large role in how well they end.

Don't think you're saving time or money by letting your combo person handle the non-basic issues. Think, instead, of the thousands of dollars and hours of your time you'll have to spend hiring an attorney to respond to a single complaint by an employee to the EEOC, Labor Board, or an attorney.

No, this isn't just a pitch to hire HR consultants! It's a real concern of mine when I see companies going that route blissfully unaware of the consequences. Remember, you get what you pay for. In the end, you have to weigh the risks and determine whether you want to put your business's future in the hands of a person you're probably paying less than $50K a year.