This really hurts the company, it blows my mind how such a seriously important part of the company can be treated so casually. If the person(s) in charge of hiring at a company aren't putting 100% into it then the ENTIRE company is affected.
Any opportunity to put HR in the hands of people who know what they're doing should be taken.
Sadly this is true. I had a startup that was acquired and we went from being a 50 person company to being a 250 person company, and later nearly a 1500 person company. And our original HR person who was more of the morale/culture/lets stay balanced kind of person, quit after the 'real' HR people explained to her what her job in HR was. I was helpless to change her fate and that really bothered me for a long time. After that and later Sarbanes Oxley and "Regulation FD" stuff were on everyone's mind, the people that called themselves 'HR' became compliance officers. Their job is/was to protect the company. That was sad for me.
The zero value add admin/compliance parts of HR are what you should outsource -- absolutely not the value-add parts like recruiting, internal culture management, picking unique benefits, etc.
My advice to any founder is to seriously consider making an OM hire sooner rather than later.
Someone could make a mint doing an good job of this online.
Most interesting though, in addition to dealing with compliance, taxes, etc. a lot of HR companies are looking to offer a wide range of services. I'm thinking of things like manager leadership training, employer handbook development, onboarding, compliance assessments, job descriptions and postings, employee satisfaction surveys, etc. etc.
A lot of that stuff sounds not only unnecessary for a startup, but downright wasteful. If you have 8 guys working for you, is that really the most productive place to put money?
It is because that stuff is such pointless crap, yet mandatory, that it is a productive place to put money vs. founder or employee time.
One startup I worked with had a person like this who was bot the recruiting person and morale person, and they had a dedicated morale budget. Rather than spend the budget on a monthly pizza party or something repetitive, he'd often save up a couple months of it and surprise us with something completely unexpected.
That one guy-- who was not a founder-- had a larger positive impact on the culture and effectiveness of the company than most of the founders (who at least get credit for knowing they needed someone whose mission was to create a good company culture and keep morale up.)
It's basically NEVER anyone in HR.