For many business owners, reaching 10 employees feels like a major milestone. Hitting 50 is an entirely different level of growth. The informal processes that worked for a small team often start to break down as your workforce expands. 

Here are some of the most common HR challenges growing businesses face and how to address them. 

1. Communication Starts Breaking Down

When you have 10 employees, everyone knows what’s happening. At 50 employees, information can become inconsistent, delayed, or lost altogether. 

Solution: Create structured communication channels. Regular team meetings, manager updates, and company-wide communications help ensure everyone receives the same message and stays aligned on priorities. 

2. New Managers Need Support

As your business grows, you can’t manage everyone directly. Employees are often promoted into leadership roles because they’re great at their jobs, not because they’ve been trained to lead or have leadership experience. 

Solution: Invest in leadership development. Provide training on performance management, feedback, conflict resolution, and coaching so managers have the tools to succeed. 

3. Culture Becomes Harder to Maintain

A strong culture develops naturally in a small business. As new employees join, maintaining that culture requires intention. 

Solution: Clearly define your values and regularly reinforce them through hiring, onboarding, recognition programs, and leadership behaviour. 

4. Recruitment Becomes Ongoing

Hiring is no longer an occasional task. Growth requires a steady pipeline of talent. 

Solution: Develop a recruitment strategy that includes employer branding, standardized interviewing practices, and proactive workforce planning rather than hiring only when a vacancy appears. You may also need to centralize hiring, rather than leaving it entirely in the hands of hiring managers. 

5. Employee Relations Issues Increase

More employees mean more personalities, perspectives, and workplace challenges. Performance concerns, complaints, and conflicts become more common. 

Solution: Establish clear processes for handling employee concerns and ensure managers know when to seek HR support before issues escalate. 

6. Informal Performance Management Stops Working

As teams grow, employees need more clarity around expectations, goals, and feedback. 

Solution: Schedule regular performance conversations, set measurable objectives, and provide ongoing coaching rather than relying solely on annual reviews. 

7. Policies Become Necessary

Many small businesses operate without formal policies. At 50 employees, inconsistency can create confusion, risk, and there’s a higher chance of needing to hold people accountable. 

Solution: Implement key policies covering areas such as workplace conduct, vacation, attendance, remote work, health and safety, and harassment prevention. Also, a reminder that many provinces have policies that ALL employers are required to have. 

8. Employees Want Career Growth

Top performers often leave when they can’t see a future with the organization. 

Solution: Create development opportunities through training, mentorship, cross-functional projects, and clear career paths wherever possible. 

9. HR Starts Taking Up Too Much Time

Many business owners reach a point where managing people issues consumes a significant portion of their day. 

Solution: Consider dedicated HR support. Whether through an internal HR professional or a fractional HR partner, the right support can help leaders focus on growing the business while also reducing people-related risks. 

Finally, 

Growing from 10 to 50 employees requires more than adding headcount. It requires building the systems, leadership capabilities, and people practices needed to support a larger organization. 

The businesses that scale successfully aren’t the ones that avoid HR challenges. They’re the ones that address them before they become obstacles. 

At uptreeHR, we help growing businesses navigate these challenges with practical HR solutions designed to scale alongside your organization. 

 

Michelle MacFadgen, CPHR, is the Director, Client Engagement at uptreeHR, an outsourced Human Resource department for small to medium-sized businesses. Michelle and the team are based in Halifax, Nova Scotia.

To book a complimentary 30-minute consult with Michelle, click here.