You’re a small business with a lean team. You don’t have an HR department — you’ve never really needed one.

So when something people-related crops up, it goes to the person who handles payroll. Usually finance. And that works, for a while. But what starts as “Can you just sort this?” becomes “How do we handle this grievance?” or “What’s our legal position here?” Suddenly, finance is wearing the HR hat, and the stakes are a lot higher.

 

The default to finance: how we got here

It’s not hard to see why people issues often end up on a finance person’s desk in smaller businesses across the UK:

• They’re already managing payroll, pensions, and employment contracts
• They tend to have structured processes and an eye for detail
• They’re seen as neutral and dependable when conflict arises

In many SMEs, the finance lead is one of the most trusted and operationally involved people in the business. It’s not unusual for them to be the de facto point of contact for anything outside core operations: from IT issues to booking training, to handling awkward conversations.

But finance professionals aren’t trained in performance management, conflict resolution, or employment law. And they’re often juggling their own priorities, like cash flow, budgeting, and end-of-year accounts.

So when HR becomes a bolt-on responsibility, the cracks start to show.

 

Why it doesn’t work long-term

In the early days, it might feel like HR-lite is good enough. But as the team grows, the business matures, and people problems get trickier, the default-to-finance approach becomes risky.

Here’s why it doesn’t stack up:

• Non-compliance risks: Employment law is complex and ever-changing. A misstep in disciplinary action or a poorly worded contract could lead to legal exposure.
• Poor employee experience: Delays in addressing issues, lack of clear policies, or inconsistent people practices can damage morale and trust.
• False economy: Time spent on HR issues pulls finance (and business owners) away from strategic work. Mistakes can cost more to fix later.
• Culture misfires: Without clear HR leadership, workplace culture can drift, causing confusion, disengagement, and retention problems.

It’s not about fault. It’s about fit. Finance teams are brilliant at what they do, but they shouldn’t be expected to run HR too.

 

Example case: when good intentions create tension

Let’s say a small accountancy firm in Manchester has ten employees. The Office Manager, who also supports the finance function, is asked to handle a dispute between two team members. There’s no formal grievance procedure in place, and no previous training in handling sensitive employee matters.

What starts as a quick favour ends up taking weeks — including time off for stress, uncertainty among the wider team, and a client complaint due to delayed deliverables.

It’s more common than you might think. Plenty of small businesses find themselves in this position — simply trying to keep things running smoothly while juggling people issues on the side.

 

The smarter alternative: outsourced HR support for small businesses

You don’t need to build an internal HR team from scratch to manage these challenges. With outsourced HR support, small businesses can get expert, flexible help when they need it — without the overhead of a full-time hire.

Bringing in an independent HR consultant gives you access to:

• On-demand expertise: From contracts to culture change, you get someone who’s seen it all before.
• Tailored support: Advice that fits your size, sector, and goals — not just one-size-fits-all templates.
• Crisis handling & prevention: Whether it’s navigating redundancies, mediating conflict, or pre-empting risk, you’re not going it alone.
• Flexible costs: You don’t need to hire a full-time HR person. Outsourced HR support scales with your needs.

It’s like having a trusted advisor in your corner. Someone who understands people, understands business, and knows how to balance the two.

 

Recognising When It’s Time for Expert HR Support

Wondering if it’s time to call in some help? These are the red flags to look out for:

• You’re copying and pasting policies from the internet
• Your employee handbook hasn’t been updated in years
• Team conflict is becoming more frequent — or more difficult to manage
• You’re unsure how to handle sickness, performance or disciplinary issues
• You’re hiring more people but have no structured onboarding process
• You’ve had a close call with a legal issue (or worse, a tribunal)

If any of these ring true, it might be time to look into outsourced HR support for small businesses.

 

Balancing compliance, culture, and growth

There’s a misconception that HR is just about policies and procedures. But good HR does more than keep you compliant — it helps your business grow.

With the right support, you can:

• Build a culture where people want to stay
• Develop fair, consistent people practices
• Hire (and retain) the right talent
• Make confident decisions when tricky situations arise
• Focus your time on growth, not admin

Small businesses often walk a tightrope between keeping costs lean and building a workplace that works. HR doesn’t need to be a blocker — with the right outsourced support, it becomes an enabler.

 

What to look for in an outsourced HR provider

Not all HR consultants are the same. When you’re ready to explore support, look for:

• Experience with SMEs: Someone who understands the pace, pressure and constraints of small business life
• Up-to-date legal knowledge: Employment law moves fast — your HR support should too
• Approachability: You need someone your team feels comfortable talking to
• Strategic thinking: The best HR consultants don’t just react — they help you plan ahead

Working with an Accredited HRi Certified^® Consultant can make a difference.

Read How to Choose the Right HR Consultant – 7 Key questions to Ask for more on outsourcing HR.

 

Ready to take HR off your finance team’s plate?

If you’re starting to feel the strain of people challenges falling to finance, you’re not alone. The good news? You don’t have to build an HR department overnight.

Instead, explore the HRi Directory to find experienced, accredited independent HR consultants who specialise in outsourced HR support for small businesses across the UK.

Whether you’re based in London, Leeds, Leicester or Llandudno, HRi consultants understand the regional and sector-specific pressures facing British SMEs.

They’re here to help you get the people stuff right — so your business, and your team, can thrive.

Author: Mary Asante | HRi