HR for Series B Startups: What to Hire and When

HR for a Series B startup is two separate problems. The first is compliance and administration: payroll, benefits, employment law across states and countries, onboarding paperwork, the handbook. A fractional HR partner and a PEO can run all of it well past Series B. The second is the recruiting engine and the design of the organisation, and that is the one nobody can run for you. The first senior people hire should own the second problem. Hiring a generalist HR manager to run the first one produces policy before the company has an organisation to apply it to.

This page is written for the CEO or COO who has just closed a B, has forty to a hundred people, and has been told by the board that it is time to "build out HR". That instruction hides a real decision, and the default way of following it is usually wrong.

What changes at Series B

Before the B, the founder knew every employee and most hiring decisions were made in a conversation. After it, three things happen at once. The hiring plan doubles, so recruiting becomes a system rather than a favour asked of the network. A management layer either exists or is about to, so someone has to decide how teams are structured and who reports to whom. And the company crosses the headcount thresholds where employment compliance stops being something a founder can handle from a checklist.

Those are three different jobs. The mistake is to hire one person and expect them to do all three, which produces a generalist who is competent at compliance, adequate at recruiting coordination, and absent from the organisational decisions, because those happen in rooms an HR manager is not invited into.

Separate the functions before you hire

Once the functions are separated, the hiring decision is easier. The company almost always needs the third row filled by a senior person and the second row filled by someone who has built a recruiting function before. The first row is the one that feels most urgent, because it carries legal risk, and it is the one that is cheapest to buy rather than hire.

The first senior people hire

The title varies: head of people, VP People, head of talent. The mandate should not. This person owns how the company grows its headcount and how that headcount is organised. Concretely, in the first two quarters they should produce a hiring plan tied to the operating plan rather than to requests from managers, a levelling framework so that offers stop being negotiated one at a time, and a clear answer on team structure for the functions that are about to double. The method for the first of those is in hiring strategy for startups.

Hire for the organisational judgment and buy the rest. A candidate who has run a people function at a company that went from fifty to two hundred has seen the specific failures your next eighteen months contain. A candidate whose background is HR operations at a large company has seen none of them, however strong their compliance knowledge. If the question of how to build the first management layer is still open, this hire should be in the room for it, which tells you the level they need to be hired at.

Recruiting is the part that decides whether the B worked

The money raised at Series B is spent mostly on people. Whether it produces the growth the round was priced on depends almost entirely on whether those people are the right ones and arrive on time. That makes recruiting the highest-stakes people function at this stage, and it is routinely under-resourced because it is treated as a sub-task of HR.

A Series B company hiring forty or more people in a year needs at least one in-house recruiter running the process, plus a specialist partner for the roles the in-house function cannot reach: senior engineers, engineering and product leadership, and the newer technical roles where nobody internally can calibrate a candidate. The question of when to hire a head of recruiting versus keep hiring yourself is settled by volume: sustained hiring at that rate is a full-time system, not a founder's side project.

What not to do

• Do not hire a generalist HR manager first. You will get a handbook, a performance review cycle, and no change in how the organisation is built.
• Do not report the people leader into finance. It signals that the function is about cost control, and the strong candidates for the role read the org chart before they accept.
• Do not build HR process ahead of the organisation. A levelling framework for eighty people applied to thirty produces bureaucracy without clarity. Sequence the systems to the headcount they serve.
• Do not assume headcount is the answer to every constraint. Series B is when the hiring plan is most likely to contain roles that should be automation or a restructured team. The people leader should be able to say so. That is the argument behind deciding between hiring, automating, and a super IC, and it is a Series B problem more than a seed one.

Common questions

Does a Series B startup need an HR department?

It needs the functions, not necessarily the department. Compliance, payroll, benefits, and onboarding can be run by a fractional HR partner and a PEO well past Series B. What a Series B company cannot outsource is the recruiting engine and the design of the organisation, and that is where the first senior people hire should go.

What is the first HR hire at Series B?

For most Series B companies it is a head of people or head of talent whose mandate is recruiting and org design, with compliance and administration handled by a fractional partner. Hiring a generalist HR manager first tends to produce policy before the company has an organisation to apply it to.

How many HR people does a 100-person company need?

Typically one senior people leader, one or two recruiters if hiring is sustained, and one operations or generalist role. A ratio of roughly one people-function person per forty to sixty employees is common at this stage, but the composition matters more than the count. A company hiring forty people a year needs recruiters before it needs a second generalist.

Should HR report to the CEO or the COO at Series B?

To the CEO if the mandate is organisation design and hiring, because those are CEO decisions. To the COO if the mandate is operations and compliance. Reporting the people leader into finance is common and usually a signal the company sees HR as cost control rather than as how the organisation gets built.

When should a startup replace fractional HR with a full-time leader?

When someone senior needs to spend most of their week on decisions about people rather than administration of them: who to hire next, how teams are structured, why attrition rose in one function. A fractional partner can run the mechanics indefinitely. They cannot be in the room for the organisational decisions that Series B forces every month.