The decision most SMEs hit at around 10 to 50 staff.

For a long time, people matters get handled by the owner, the office manager or the finance lead. Then the team grows, employment law tightens, and the questions get harder: a grievance, a sickness case, a restructure, a handbook that is years out of date. At that point most small businesses ask the same thing: do we hire someone to own HR, or do we bring in outside support?

Both can be the right answer. It depends on your size, how much HR activity you actually have, and how much risk you are carrying. Here is the honest version, including the bits a recruiter trying to fill an HR vacancy will not tell you.

The real cost of an in-house HR officer.

The salary is only the start. In the South East, a capable HR officer or advisor typically commands somewhere in the region of £35,000 to £45,000, and an HR manager more again. On top of the salary you carry employer National Insurance, pension contributions, holiday, equipment, HR software, ongoing training to keep them current, and the cost of recruiting them in the first place. Loaded up, a single mid-level in-house hire rarely costs a business under about £45,000 a year, and often more.

For that, you get one person. One person who takes holiday, goes off sick, and eventually leaves, taking the knowledge with them. One person who is usually a generalist, so when something genuinely tricky lands, a complex grievance, a TUPE transfer, a tribunal claim, they may be learning on your time. For a smaller business, that is a lot of fixed cost and a single point of failure.

In-house versus outsourced, side by side.

In-house HR officer Outsourced HR
CostSalary plus on-costs, often £45,000+ a year, fixedA fixed monthly fee priced on your team size, far less than a full salary
ExpertiseOne generalist, learning the hard cases on your timeA whole team across compliance, employee relations, contracts and recruitment
CoverHoliday, sickness and leaving all create gapsAlways there, no single point of failure
ScalabilityFixed cost whether you are busy or quietFlexes with your business, scale up or down
RiskYou carry the risk if they get it wrongProfessional advice, insured and accountable

When in-house makes sense

Once you are past roughly 50 to 80 employees, with a constant volume of day-to-day people activity, a dedicated in-house HR person, or a small team, starts to earn their keep. At that size there is genuinely enough work to fill the role, and the fixed cost is easier to justify. Many businesses that size still keep outside support on hand for the specialist and high-risk matters.

When outsourcing wins

For most SMEs up to around 50 staff, outsourcing is the better value by a distance. You get senior expertise and a whole team for a fraction of a salary, no gaps when someone is off, and a fee that flexes with you. You only pay for what you need, and you are not carrying the risk or the recruitment headache of an in-house hire.

Where Beagle HR fits.

We are the outsourced HR team for small and medium businesses across Surrey and the wider UK. You get a dedicated HR partner on call for the day to day, plus the depth of a full team behind them for the harder matters, all on a fixed monthly fee priced on your team size. If you are not sure which way to go, that is exactly what the free review is for. We will give you an honest read on whether you need to hire, outsource, or simply tidy up what you already have.

Common questions.

In-house vs outsourced HR FAQs

For most SMEs, yes, and by a wide margin. A loaded in-house salary is often £45,000 or more a year for one generalist. Outsourced support gives you a whole team for a fixed monthly fee priced on your team size, usually a fraction of that, with no holiday or sickness gaps.
As a rough guide, once you are past 50 to 80 staff with a steady, high volume of HR activity, an in-house role starts to make sense. Below that, outsourcing almost always gives better value and broader expertise. We will give you a straight answer for your situation on a free review.
Yes, and many growing businesses do. They keep a junior in-house person or office manager for the day-to-day administration, and use us for advice, compliance, and the specialist or high-risk cases. We can support your in-house person rather than replace them.
We price on your team size and what you actually need, not a one-size package, and we agree the fee with you on a free 15-minute review before any work begins. It is a fixed monthly fee with no hourly clock and no lock-in on the ongoing retainer.

Not sure whether to hire or outsource?

Book a free 15-minute review. We will look at your team, your workload and your risk, and tell you honestly which way makes sense, even if that is not us.

Book your free HR review