You're the founder, the MD, and the HR department. Here's what to do about it.

Nobody starts a business because they want to manage a grievance process. Or sit through a disciplinary hearing. Or work out whether someone's long-term absence is now a disability under the Equality Act.

But if you're running a business with 20, 40, 80 people and no HR function, all of that lands on your desk. Along with the recruitment, the contracts, the performance conversations you keep meaning to have, and the exit that needs handling sensitively because the person is well-liked even though they've been underperforming for a year.

It's not your area of expertise. It's nobody's fault that it isn't. But it doesn't stop it being your responsibility.

The three things that catch founders out

The first is delay. Most founders I speak to know they have a people problem. They've known for months. Sometimes years. But dealing with it feels uncomfortable, or complicated, or like it might make things worse. So it gets pushed to next week, next month, next quarter. And the longer it sits, the harder it gets. An underperforming employee who needed a direct conversation six months ago now needs a formal process. A minor grievance that could have been resolved informally is now a written complaint with a solicitor involved.

The second is informality. Small businesses run on trust and relationships. That's a strength. But it becomes a vulnerability when things go wrong. If you've never put expectations in writing, never documented a conversation, never followed a formal process because "we're not that kind of business," you have very little to stand on if someone challenges you. Employment tribunals don't care that you're a nice person who runs a good company. They care about whether you followed a fair process. And process means documentation.

The third is personal involvement. When you've built the team yourself, every people decision feels personal. Letting someone go feels like a betrayal. Having a performance conversation feels like a confrontation. Managing someone out who was there from the beginning feels like a statement about the early days of the business. This emotional weight makes everything harder and slower than it needs to be, and it's one of the reasons external support makes such a difference. Sometimes you need someone who can see the situation clearly because they're not inside it.

What you can do right now

Get your contracts in order. Every employee should have a written statement of terms. If they don't, fix it. It's a legal requirement and it's also your first line of defence if anything goes sideways.

Get a basic set of policies in place. Disciplinary and grievance procedures are legally required. Absence management, performance management, equal opportunities, and data protection are practically essential. They don't need to be 40-page documents. They need to be clear, fair, and consistently applied.

Start having the conversations you've been avoiding. Not as formal processes. Just as honest, adult conversations about what's working and what isn't. Most people respond well to clarity. What they don't respond well to is being blindsided by a formal process when nobody told them there was a problem.

And when something complex comes up, whether that's a potential dismissal, a grievance, a discrimination concern, or a restructure, get advice before you act. The cost of a conversation with someone who knows employment law is a fraction of the cost of getting it wrong.

You don't have to do this on your own

The founder-as-HR-department model has a shelf life. It works when the team is small and the relationships are simple. It stops working when the headcount grows, the complexity increases, or something serious happens for the first time.

Recognising that isn't a failure. It's a sign the business has grown past the point where one person can hold everything. Getting the right support in place, whether that's a retained adviser, a fractional HR leader, or eventually a permanent hire, is one of the highest-leverage things a founder can do. It frees up time, reduces risk, and makes the business a better place to work.

Book a free discovery call with King HR Advisory if you want to talk about what that could look like.