Your Guide to HR Director Types: Finding the Right Fit for Each Growth Stage

CEOs often feel uncertain about the HR director's qualities and competencies to look for in a prospective candidate. And it’s no surprise, as an HR director's responsibilities can differ significantly depending on the company’s growth stage.

For instance, in startups, the focus is on talent acquisition, building a strong company culture, and establishing processes from the ground up. As businesses grow, the focus shifts to change management and team expansion. In mature companies, HR directors manage complex HR transformations, especially during mergers and acquisitions.

So, should you expect your candidate to cover all these areas right away? Or should you prioritize, and if yes, what exactly?

With over 17 years of experience in strategic HR, I know exactly what type of HR director a business needs at each stage. In this article, I’ll explain different HR roles during business growth and share practical tips for finding the perfect fit for your organization.

HRD for startups: Building up a team and fostering a growth-oriented work environment 

Large organizations usually have an HR executive who focuses on long-term HR strategies and an HR manager who handles operational matters. In startups, however, these roles often overlap. An HR director should be able to set up a human resources strategy, focusing on scalable, long-term initiatives, along with handling immediate recruiting needs. Below, I outlined the main areas an HRD at a startup should cover. 

Talent acquisition & hiring

One of the primary tasks of an HRD at startups is to build a strong talent pool to quickly fill open positions. But since startups often have close-knit teams, it’s essential that new hires not only possess the necessary hard skills but also:

• Align with the startup’s values.
• Adapt to change and take on multiple roles as the company grows and pivots.
• Can learn quickly and potentially outgrow their roles to become team leaders.

Recruiting for a startup often goes hand-in-hand with shaping a hiring process. So, the ideal candidate for the HR director role should have experience scaling teams in similar environments and excel at multitasking.

Corporate culture development

In startups, corporate culture often develops organically. However, it can become inconsistent or toxic if it isn't clearly defined, causing tension and hindering growth. The HRD should know how to balance discipline and flexibility. This usually involves:

• Defining and articulating the startup’s core values and mission to ensure all team members are aligned with the founders' vision.
• Building an onboarding process that introduces new hires to the startup’s culture.
• Fostering a positive environment with open communication and constructive feedback, as startups often benefit from ideas and insights contributed by those who work directly on the product.

So, when hiring an HRD for a startup, look for candidates who recognize the importance of a strong culture and understand how to cultivate it.

Employee motivation 

Startups may lack the brand recognition of larger companies. So, HRDs must identify what motivates employees and create targeted retention strategies. This can include implementing Objectives and Key Results (OKRs), Key Performance Indicators (KPIs), and Employee Stock Ownership Plans (ESOPs). 

To evaluate the effectiveness of the HRD in this area, you can establish KPIs related to employee turnover. With an average turnover rate in the tech industry of 8.2% in the U.S. and 6.4% globally, aiming for a retention benchmark of 5-6% can be a solid target.

Lastly, the HR director in a startup will wear many hats, so this person should have a mix of hands-on experience and be ready to take on extra responsibilities to enhance HR practices. All the strategic functions mentioned above become even more critical as organizations anticipate rapid scaling. So, let’s further discuss HR roles during business growth.

HRD for scaling companies: Supporting the rapid business growth

More than 80% of fast and successfully growing companies prioritize HR, while businesses with flat or declining growth often struggle with recruiting, development, and retention. This only highlights that hiring the right HR director is a key differentiator for the success of businesses at the scaling phase. Overall, HRD for fast-growing companies should be able to provide support in the following areas. 

Strategic recruiting 

Fast-growing companies need to move away from ad hoc hiring decisions and adopt a structured approach. One example. Anna Binder, Asana's HR executive, shifted recruitment from a "hire quickly" startup mentality to a well-organized process as the company grew from 100 to nearly 2,000 employees. She emphasized planning with key questions like: “What roles do we need? How many hires per month? What does our recruitment pipeline look like?” It took over a year, but the company achieved the growth it aimed for.

Some of the tactical steps to support this strategy will be:

• Building a recognizable employer brand to attract the right candidates.
• Developing a talent acquisition strategy based on an in-depth understanding of business needs and future initiatives.
• Creating clear job descriptions with accurate responsibilities and career paths.
• Optimizing a hiring process with clear stages such as sourcing, screening, interviewing, and onboarding.

Strategic recruiting also includes diversifying talent pipelines to quickly expand the pool of available candidates.

Employee development & retention

Without a focus on employee development, businesses often experience high turnover, which leads to increased costs. And the more people you have, the faster the problem snowballs. An HRD at a scaling company must know how to avoid it by:

• Organizing the development of structured learning programs tailored to business needs.
• Making on-demand training resources available for employees.
• Working with employees to create personalized career growth plans, detailing opportunities for promotion.
• Pairing junior employees with senior leaders for mentorship, allowing for knowledge sharing and guidance.

Since employee retention is crucial for sustaining growth in scaling companies, try to find a candidate who can manage it effectively—both in addressing immediate crises and in the long term.

Change management with Agility 

To support business expansion, HR needs to be agile. This means the HR function within an organization must be responsive and adaptable, which in practice translates into: 

• Flexible processes. HRDs at scaling companies shouldn’t be rigid in their approaches. They must be able to pivot strategies as needed to align with current organizational goals.
• Regular feedback loops. The focus should stay on continuous improvement with check-ins and feedback sessions to understand employee experiences and expectations.
• Data-driven decision-making. HRDs at fast-growing companies should rely on data and analytics to make relevant, evidence-based HR decisions during scaling.
• Employee-centricity. It means prioritizing employee needs in HR practices throughout the employee lifecycle. This could involve customizing training programs, benefits, or working schedules.
• Autonomy and growth. HRDs should encourage employees to take charge of their work, fostering a growth mindset where they view challenges as opportunities to improve.
• Openness to innovation. For HRDs at scaling companies, nothing is stone. They must keep an eye on innovation, continuously experimenting and improving. 

HRD for established businesses: Ensuring stability and guiding through strategic shifts

HR leadership in mature businesses shifts its focus from building foundational processes to maintaining organizational stability through strategic HR management. This evolution of the HR director’s role—from function-oriented to partnership-oriented—was described by Professor David Ulrich and covers the following responsibilities.

C-level HR management 

HR directors start acting as strategic business partners to other company executives. When HR directors have a seat at the table, they can directly contribute to business success through:

• High-level alignment of talent development, management, and company culture with overall business goals.
• Data-driven top-level decisions in recruitment, performance management, and workforce planning.
• Talent-related risk mitigation by analyzing turnover trends, addressing skills gaps, ensuring regulatory compliance, and developing succession plans to avoid talent shortages.
• Leadership programs that help a company cultivate management skills essential for executing its strategy.

An HR director should demonstrate to other C-level executives how effective human capital management influences business results and advocate for important HR decisions, such as automation.

Leadership in organizational change

Whether driven by mergers, restructures, or shifts in strategic focus, HR directors play a critical role in managing organizational change. Specifically, they are responsible for smooth employee adaptation to transformations, which involves:

• Encouraging continuous learning, which includes training employees to adapt to change and equipping leaders with essential change management skills.
• Maintaining clear and transparent communication to help employees understand the reasons for change and their roles in the process.
• Supporting employees throughout the transition and assessing the impact of change initiatives using feedback loops, surveys, and performance metrics.

The benefit of effective HR for organizational growth through transformation is hard to overestimate, so it’s crucial to hire someone with sufficient business understanding and empathy for this role.

Promotion of employee well-being 

Ulrich describes this component of HR leadership in mature businesses as the "Employee Advocate." It requires HR directors to ensure the business provides a healthy, supportive work environment through:

• Wellness programs that support work-life balance.
• Open communication channels that give employees a voice in the organization.
• An inclusive workplace where all team members are treated fairly and equitably.
• Conflict resolution support that is fair and confidential.
• Representation of employee needs in leadership decisions.

By championing the well-being and interests of employees, HR directors bridge the gap between the individual employee’s needs and the organization's overall goals. This creates a balanced foundation where employees and the organization can grow together.

Operational support

HR directors in established businesses oversee administrative processes to ensure they remain efficient, compliant, and aligned with the organization's strategic goals. This includes:

• Streamlining HR workflows through technology integration to reduce administrative burdens.
• Staying updated on legal changes and ensuring HR practices adhere to regulations.
• Maintaining accurate data management and generating reports to provide insights into the workforce.
• Developing HR service delivery models, including shared services, employee self-service portals, and HR help desks.

So, when looking for an HR director for your mature business, try to find out if a candidate can take a helicopter view of your processes and initiate improvements. 

Now that you know key HR director types, how do you choose the right one for your business? Next, I’ll provide some recommendations.

How to choose the right HRD for your business

Finding the ideal HR director for your organization can be challenging, but it's a crucial decision that significantly impacts your business's success. To ensure the right fit, it’s essential to thoroughly assess candidates. Based on my experience, here’s what I recommend focusing on:

• Ideal candidate profile. You need to understand who exactly you’re looking for, which depends on your business maturity stage and is tied to the HR director types I described earlier. HRDs for startups and fast-growing companies must be flexible and comfortable with working in uncertainty. For mature businesses, you need to pay more attention to the candidates’ experience in business and change management.
• Cultural fit. It's crucial for a candidate to align with your organizational culture. Ask questions like, “How have you fostered a culture of open communication in your previous roles?” or “What strategies have you implemented to enhance diversity and inclusion?” It will help you assess whether the HR director will genuinely uphold and support your corporate values.
• Communication and HR leadership skills. Finding out how the candidate interacts with top management and the team is equally important to ensure your collaboration will be smooth and productive. For example, you may ask them to provide specific examples of their past experiences in leading HR initiatives and presenting them to the board. 
• Experience in сhange and possess management: If your company is planning to scale or reorganize, ask questions like, "Have you been involved in significant organizational changes or restructurings? If so, how did you implement them?" 
• Evaluation of key competencies: Discuss key HR competencies like recruitment and talent acquisition, employee development and motivation, change management, and more. I recommend using the STAR model—a proven approach for assessing candidates based on real-life examples. By asking about specific situations they faced, tasks they addressed, actions they took, and the results achieved, you can gauge how well they’ll manage key responsibilities at your company.

Overall, a thorough assessment will help you find an HR director who not only aligns with your business goals but also enhances your organizational culture, ultimately driving your company forward.

Wrapping-up

As a company evolves from a startup to a scalable business and further to a mature organization, the HR director's responsibilities change. Understanding the different HR director types and their roles at various stages of the business lifecycle is essential to get the expected results. To find the ideal HR director who will support your organization's goals, you also need to assess candidates based on their experience, cultural fit, and leadership skills. 

If all of this seems daunting, my colleagues at INDIGO-Tech Recruiters and I would be happy to assist you. We have years of experience in executive search with top tech companies on our client list. Contact us, and let’s discuss your needs!