Leadership1 publisherNot yet confirmed elsewhere3 min readPublished
FrankCrum survey finds 39% of small firms leave HR to whoever is available
FrankCrum surveyed 1,000 small-business owners and HR handlers and found 39% of firms have no dedicated HR department or employee. The work mostly falls to people who took it on informally, while the firm keeps the legal exposure from terminations and pay disputes.
The Board Room · Leadership desk
Drafted by a language model from the sources cited here and checked against its claim ledger before publication. How we use AISend a correction
What happened
- Where no HR staff exist, the owner handles the work in 15% of firms, it is shared informally in 14% and an office manager absorbs it in 10%.
- Only 13% of people with a role in HR decisions hold an HR title, while 29% are assistants, coordinators or specialists with no management title.
- Some 43% of those doing HR work spend 10 or more hours a week on it, mostly on top of the job they were hired to do.
- Pay rose for 34% of respondents when HR duties were added, while 42% absorbed them with no increase.
- Half of small businesses use AI for HR tasks, including drafting handbook content and guidance on discipline and terminations.
Compiled by The Board RoomSomething wrong?How this is made
Why it matters
- cost With more staff taking on HR unpaid than paid, the function's real cost stays off payroll until a dispute puts a price on it.
- exposure Firms using AI to draft termination guidance route a decision 23% of respondents already fear a claim over through staff who mostly lack HR training.
- decision Owners face a cheap choice this quarter, written ownership of terminations and personnel files plus a named outside adviser, before any decision on a paid HR role.
- constraint With 59% reporting rising HR hours, the informal setup gets harder to hold on top of a full job each year it runs.
The three arrangements in FrankCrum's report sum to exactly 39% [20]. Every firm without HR staff, in other words, has handed the job to the owner, to a loose group or to the office manager. According to the report, the duties begin as a quick favour or a temporary fix and then become permanent [5]. Some 18% of respondents said HR entered their role informally with no change of job, and 14% said it built up over time [6]. The report calls these people "accidental" HR managers [19].
Pay has not followed the work, so for many firms the HR function never shows up as a cost. Unpaid absorption outran paid absorption by eight percentage points [21]. "A responsibility nobody negotiated is one nobody has to pay for. Many companies use that to their advantage," the report said [10].
The legal worries in the survey come from a pool of owners and the employees doing HR [1]. About a quarter fear employee lawsuits and 23% fear wrongful termination claims, while 20% cite employment law compliance and 16% wage disputes [11][12]. The published findings do not separate owners' answers from their staff's, so this survey cannot show whether owners see the exposure their HR handlers describe. In the 15% of firms where the owner does HR personally, the owner is the person describing it [3].
Terminations appear on both the risk list and the AI list. According to FrankCrum, 25% use AI to draft guidance on disciplinary actions or terminations and 24% use it to write workplace policies [14]. The report said "a thorough and documented review policy is more important than ever" and recommended that experts review AI-drafted HR material [15].
The owner's plain objection is cost: a small firm may not carry a salaried HR hire. The report's first steps need none, and they trade a small amount of writing now against decisions improvised during a dispute. "Write down who owns terminations and who keeps the personnel file, and that question stops being improvised in the week it matters most," it said [16]. It also tells owners to settle in advance whether an employment attorney or an outside HR line takes the hard calls, and to "put the number somewhere findable at 4 p.m. on a Friday" [17].
The workload is the slower problem, measured over years. Some 59% said their HR time grew in the past two years, including 20% who called the rise significant [8]. "Burnout becomes even more likely when they're handling high-stakes HR situations with little to no training," the report said [18]. Writing down ownership is this quarter's decision. If the hours keep climbing, the next one is whether the person named on that page gets a paid HR role.
What to watch
- A breakdown of FrankCrum's results separating owners from the staff doing HR, to test whether owners rate the legal exposure the same way.
- Claims data on wrongful termination and wage disputes at firms without HR staff, to turn the survey's stated worries into measured outcomes.
- A repeat survey showing whether the 59% reporting rising HR hours keeps climbing.