HR Structure for 50 Employees: Team Size, Costs & Hiring Guide 

Reaching 50 employees changes how your business needs to manage people. The informal approach that worked at 20 or 30 employees starts to create risk as more managers take on people responsibilities and employment issues become harder to handle. 

At this stage, your business needs clear ownership of HR, consistent processes and the right level of support. That does not always mean building a large in-house team. The right structure depends on your workforce, management capability and the level of HR expertise your business needs. 

Getting the HR structure for 50 employees right at this stage protects you from costly mistakes and gives you a foundation to grow. 

So, what should HR look like at 50 employees? This guide covers HR staffing models, costs and who your first HR hire should be, with practical guidance for UK businesses. For the wider picture, see our guide to how to structure your HR department by company size. 

By the end, you will know what HR support you need, what it could cost and how to plan your first 90 days. 

Decision Making Summary 

• Stable, low-complexity business or facing change on a tight budget: consider outsourced or fractional HR, supported by an administrator. 

• Stable headcount with few employee relations issues: consider a Senior HR Advisor. 

• Growing towards 100 staff, investor-backed or running multiple sites: consider an in-house HR Manager. 

• Restructuring, redundancies or a live tribunal claim: consider an interim HR Manager. 

Key Takeaways 

• Most businesses with around 50 employees need a dedicated HR professional, usually an HR Advisor or generalist HR Manager, reporting to the Managing Director, Finance Director or Operations Director. A valid information and consultation request must also be supported by at least 15 employees. 

• Budget roughly £40,000 to £78,000 a year for an in-house HR hire, including salary and employer costs, or £6,000 to £15,000 a year for an outsourced HR retainer covering a narrower range of services. 

• Fifty employees is a legal threshold. Once you reach it, staff can formally request information and consultation arrangements. 

• From 1 January 2027, the unfair dismissal qualifying period falls from two years to six months, so consistent people processes become essential. 

• Design the structure with 100 employees in mind so your first HR hire can grow with the business. 

Contents 

1. What an Effective HR Structure for 50 Employees Looks Like 

2. Why 50 Employees Is a Turning Point for a Small Company HR Department 

3. Comparing HR Staffing for Small Business at 50 Employees 

4. Choosing Your First HR Hire at 50 Employees 

5. Building Your HR Team for 50 Employees in the First 90 Days 

6. Common Mistakes in Small Company HR Department Design 

7. When to Grow Beyond Your HR Structure for 50 Employees 

8. Conclusion 

What an Effective HR Structure for 50 Employees Looks Like 

At 50 employees, a practical HR structure centres on one dedicated HR professional, with support from finance, technology, employment law specialists and line managers. 

For many businesses at this size, that means an HR Advisor or HR Manager working three to five days a week and reporting mainly to the Managing Director, but sometimes to the Finance or Operations Director, depending on the organisation’s structure. Payroll can remain with the finance team or an external payroll bureau, while an HR information system manages employee records, absence and holidays. An employment law adviser can provide specialist support when more complex cases arise.  

Line managers continue to handle day-to-day performance, absence and people conversations, but within consistent policies and with access to HR guidance. The aim is not to build a large HR department. It is to establish clear ownership of people management, with reliable support around it.  

The table below shows how these responsibilities can typically be divided in a 50-person business. 

Component	Who typically does it	Time commitment	What it covers
Dedicated HR lead	HR Advisor or HR Manager	Three to five days a week	Employee relations, policies, recruitment support, onboarding and compliance
Payroll	Finance team or payroll bureau	A few days a month	Pay runs, pension auto-enrolment and statutory payments
HR information system	Cloud software	Varies by provider and features	Records, absence, holiday and document storage
Employment law support	Solicitor or advice service on retainer	As needed	Complex dismissals, tribunal risk and contract changes
Line managers	Department heads	Part of their existing role	Absence, performance conversations and first-stage issues

Where Should HR Report? 

At around 50 employees, the HR lead should report directly to the managing director or chief executive. This gives HR a clear voice in business decisions and the authority to advise on sensitive employee matters. 

We often see HR placed under the finance director because finance manages payroll and budgets. But payroll and HR have different responsibilities. Keeping a working link with finance for payroll, budgets and reporting allows HR to focus on employee relations, management support and workforce planning. HR should own people processes and advice, while line managers manage their teams. This keeps responsibilities clear as the business grows. 

Why 50 Employees Is a Turning Point for a Small Company HR Department 

Reaching 50 employees marks a significant shift in how a business manages its people. Founders lose visibility, line managers handle more employee issues and the volume of HR administration increases. What once fitted around other roles now needs dedicated time and expertise. 

Fifty employees can be a significant organisational milestone, but it is not a universal legal threshold. The workload adds up quickly. At 15 to 20 per cent annual staff turnover, a 50-person business could replace eight to ten employees a year before any growth hiring. 

Every appointment involves contracts, right to work checks, onboarding and probation, followed by ongoing absence, performance and employee relations matters. 

The Legal Thresholds You Need to Know 

At 50 employees, businesses need clear and consistent HR processes. Contracts, absence, performance, disciplinary procedures and employee records all need to be managed properly.  

Other employment law changes are being introduced in stages under the Employment Rights Act 2025. ACAS guidance on the Employment Rights Act 2025 sets out the implementation dates, including: 

• 6 April 2026: Statutory Sick Pay became payable from the first day of sickness absence. 

• 1 October 2026: The time limit for most employment tribunal claims increases from three months to six months. 

• 30 October 2026: Employers must take all reasonable steps to prevent sexual harassment. 

• 1 January 2027: The unfair dismissal qualifying period falls from two years to six months, and the cap on compensatory awards is removed. 

For a 50-person business, these changes make consistency particularly important. Probation reviews, performance conversations, absence management and formal procedures need to be handled properly and recorded at the right time. 

The result is a clear planning question: how much HR capability should sit in-house and where should the business use external support? 

Comparing HR Staffing for Small Business at 50 Employees 

When planning the HR structure for 50 employees, there are four models that are particularly practical at this stage: outsourced HR with internal administration, an in-house HR Advisor, an in-house HR Manager or a fractional HR Manager supported by an administrator. Each gives you a different balance of cost, availability and expertise. 

There is no single HR structure that works for every 50-person business. The right choice depends on how quickly you are growing, the complexity of your workforce, the capability of your line managers and how much HR support you need day to day. 

Model	Typical annual cost	Best suited to	Main trade-off
Outsourced HR with an internal HR administrator	£27,000–£32,000 for the HR Administrator salary, plus separate outsourced HR fees	Stable, low-complexity businesses that need administrative support alongside specialist HR advice	Day-to-day HR ownership remains split between the administrator and external provider
In-house HR Advisor	£35,000 to £50,000 salary	Stable businesses needing consistent day-to-day support	Needs external escalation for complex or senior cases
In-house HR Manager	£45,000 to £65,000 salary	Growing or investor-backed businesses heading towards 100 staff	Higher cost, and may be under-used if growth stalls
Fractional HR Manager with an administrator	£20,000 to £45,000 for one to two days a week, plus administrator costs	Businesses facing change on a tight budget	Limited availability when urgent issues arise

How to Read These Numbers 

These figures are planning ranges rather than fixed market rates. Location, experience, sector and the complexity of the role can all move the cost of an HR hire significantly. For example, Robert Half’s 2026 salary data shows a considerable difference in HR Advisor salaries between locations, with median pay around £38,500 in Hull and £53,000 in London. 

Salary is only part of the employment budget. Employer National Insurance, pension contributions and benefits can increase the overall cost of an in-house hire. Recruitment can also involve a one-off fee where a business uses an external recruitment provider. For example, a 15 to 20 per cent fee on a £50,000 HR Manager salary would add £7,500 to £10,000 to the first-year cost. 

Do not choose an HR model on salary alone. Compare the total cost with the level of access, expertise and day-to-day support your business needs. 

You may also come across the benchmark of one HR professional for every 100 employees. Smaller businesses usually need proportionally more, because contracts, policies and compliance create work regardless of headcount. Our guide to the ideal HR-to-employee ratio explains how the benchmark changes as businesses grow. 

Choosing Your First HR Hire at 50 Employees 

Who should be the first HR hire in a 50-person business? For many businesses, the choice comes down to an experienced HR Advisor or a hands-on HR Manager. The right level depends on the complexity of your employee issues, your growth plans and how much responsibility the role will carry. 

An HR Advisor can suit a stable business where the main need is day-to-day employee support, policies and compliance. An HR Manager may be more appropriate where the business is growing quickly, expects significant organisational change or needs someone to build the HR function as well as manage current issues. 

Your situation	Recommended first HR hire	Why
Stable headcount, few employee relations issues and a founder still close to the team	Senior HR Advisor	Covers compliance and daily queries at the lowest sustainable cost
Growth to 100 staff within 18 to 24 months	Generalist HR Manager	Builds policies, systems and manager capability ahead of growth
Private equity investment or an acquisition planned	HR Manager with change experience	Investors expect clean contracts and reliable people data for due diligence
Restructuring, redundancies or a live tribunal claim	Interim HR Manager for three to six months	Brings immediate expertise without a permanent commitment
Multiple sites or a shift-based workforce	HR Manager or HR Business Partner with strong employee relations depth	Rotas, sites and consultation require experienced judgement

We occasionally see private equity-backed businesses appoint an HR Director at 50 employees when there are plans for rapid acquisition-led growth and a significant increase in headcount. The title should follow the scope of the role, not simply the size of the workforce.  

A senior HR leader whose role is primarily strategic may not be the right fit if the business needs someone handling employee relations, policies and manager queries every day. Our guide to whether to hire an HR Director or HR Manager first explores the distinction in more detail. 

What to Look For in a First HR Hire 

In an HR structure for 50 employees, your first HR hire will be the only HR person in the organisation. Prioritise someone who can operate independently and is comfortable handling the full range of generalist HR responsibilities. Experience working in a small HR team or as a standalone HR professional can be particularly valuable.  

Practical experience should carry more weight than qualifications alone. CIPD qualifications can provide useful evidence of professional knowledge. HR Advisors may hold a Level 5 qualification, while more senior HR professionals may have Level 7 qualifications. However, qualification levels vary by career path, so they should be considered alongside experience and the requirements of the role. See CIPD for information on professional qualifications and standards. 

Building Your HR Team for 50 Employees in the First 90 Days 

Once you have agreed your HR structure for 50 employees, the first 90 days should focus on understanding the risks, fixing the essentials and putting reliable processes in place before taking on bigger HR projects. 

A phased plan agreed with the managing director gives the new HR lead a clear starting point. By day 90 you want compliant contracts and records, a working HR system, briefed line managers and a costed plan for the next 12 months. 

Phase	Focus	Outputs to expect
Days 1 to 30	Audit	Contract and right to work checks, policy review, open cases logged and a simple risk register
Days 31 to 60*	Fix and systemise	Priority policies updated, existing HR information systems reviewed and absence and holiday processes standardised
Days 61 to 90	Enable managers and plan	Manager training on absence, probation and grievances, a probation process fit for the six-month qualifying period and an agreed 12-month people plan

*HR information systems may take longer. If the business does not already have an HRIS, selecting, trialling and implementing the right system can take three to six months, depending on the business and system chosen. 

A Typical Scenario 

The following scenario is typical of the businesses we work with. Consider a 55-person engineering business in the Midlands, with employees split between a workshop and an office. The managing director has been handling HR alongside other responsibilities, supported by telephone advice from an outsourced provider. 

After three grievances, a disputed dismissal and plans to grow to 90 employees, the business reviews its HR structure. It appoints a generalist HR Manager on a £58,000 salary because the role needs to cover both day-to-day HR and the development of a more structured function. 

In cases like this, the first audit usually uncovers outdated contracts, inconsistent absence records and managers who have never run a probation review. Over the first quarter, the HR Manager can address these fundamentals, introduce consistent processes and give managers clearer guidance. That creates a stronger base for further growth without trying to build the entire HR function at once. 

Common Mistakes in Small Company HR Department Design 

Getting the first HR hire wrong can be expensive, particularly when one person is expected to cover most of the function. The biggest mistakes usually come from matching the role to yesterday’s needs rather than the business you are building. 

1. Hiring too junior: An Advisor may suit a stable business, but rapid growth or complex employee relations may require more experience. Hire for where the business is heading. 

2. Hiring too senior: An HR Director may be excessive if the role is mainly handling employee queries, policies and administration. Match seniority to the actual scope of the role. 

3. Putting HR under finance: Payroll and HR may work closely together, but they have different responsibilities. HR needs direct access to senior leadership and the authority to advise on people matters. 

4. Leaving the first HR hire without specialist support: Even experienced generalists need access to employment law advice for complex cases. Budget for external support where required. 

5. Underinvesting in HR systems: Spreadsheets and email become harder to manage as headcount grows. A basic HR information system can improve record keeping, reporting and consistency. 

Most of these mistakes are avoidable with a clear assessment of what the business needs before the hire is made. Get the role, seniority, reporting line and support model right from the outset and the first HR hire has a much stronger foundation to work from. 

When to Grow Beyond Your HR Structure for 50 Employees 

There is no fixed employee number for the next HR hire. The need usually becomes clear when the HR lead no longer has enough capacity to support managers, handle casework and plan ahead. For many businesses, this is around 80 to 100 employees, but a more complex workforce may require additional support sooner. 

Look for these signs that one HR professional is reaching capacity: 

• You are making more than 20 hires a year and recruitment dominates the HR lead’s week. 

• You are opening a second site or adding shift patterns. 

• Your HR lead is spending more than half their time on administration rather than advising managers. 

• Employee relations cases regularly overlap, leaving no capacity for planning. 

Do not wait for HR to become a bottleneck before reviewing the structure. A six-monthly review of headcount forecasts, recruitment volumes and HR workload can show when additional capacity is likely to be needed. 

The next hire is often an HR Administrator or Recruitment Coordinator, depending on where the workload is concentrated. See our guide to HR department structure for companies with 100 employees for the next stage. 

Conclusion 

For most UK businesses, one capable HR generalist is enough to provide day-to-day support, provided the role has clear ownership, reliable systems and access to payroll and specialist employment law advice. Whether that person is an HR Advisor or HR Manager should depend on the complexity of the role and the direction of the business, not simply the salary budget. 

The key is to build enough HR capability for the business you are running now, while knowing what will trigger the next hire. Review headcount, recruitment activity, employee relations casework and management needs regularly rather than waiting for the function to become overstretched. 

Before you recruit, define what your first HR hire needs to deliver in their first 12 months. This gives you a clearer basis for setting the level of the role, writing the job description and assessing candidates. For more on growing HR, including roles at 100 and 250 plus employees, see our complete guide on how to structure your HR department. 

Need to build or strengthen your HR function? Discuss your headcount, employee relations workload and growth plans with our team to identify the right HR hiring model for your business. 

This is general guidance, not legal advice. For case-specific employment law decisions, consult the Advisory, Conciliation and Arbitration Service or qualified legal counsel.