Can’t Afford a Full-Time HR Manager? Here’s What to Do Instead

If you’re running an Australian business with 10 to 100 staff and can’t justify a $150k+ HR manager salary, you’ve got four better options:

1. Fractional HR consultant – Pay for expert advice only when you need it ($5k to $15k/year)
2. Outsourced HR company – Get a whole HR team on tap without the salaries ($12k to $36k/year)
3. Upskill someone internally + keep a consultant on retainer – Build capability with a safety net ($3k to $15k/year)
4. Combination approach – Mix and match based on what you actually need

Most Australian SMEs save over $100k per year using these alternatives while staying compliant and avoiding Fair Work claims (which cost $20k to $50k on average).

The Problem: You Need HR, But You Can’t Afford the Full-Time Price Tag

Picture this.

You’ve got 25 staff. Business is humming. You just hired three more people because things are finally taking off.

But now? Your contracts are dodgy templates from 2019. Someone just complained about “workplace culture.” And you’re pretty sure you’re meant to be doing something about modern awards, but you’ve been too scared to look.

You know you need proper HR. The kind that doesn’t involve 2am Google searches for “can I fire someone for being a pain in the arse.”

But a full-time HR manager costs $120k base salary, plus super (11.5%), payroll tax, workers’ comp, recruitment fees, and the very real risk they turn out to be one of those HR people who says no to everything and sides with employees over the business.

All up? You’re looking at $150k to $180k per year. And that’s before you factor in the risk they might leave after 18 months, or worse, create more drama than they solve.

For most Australian SMEs, that’s not realistic.

But ignoring HR? Also not an option. One Fair Work claim can cost you $20k to $50k. And that’s before you count the stress, the sleepless nights, and the very real temptation to fake your own death and move to Bali.

So what do you do?

Good news: there are four way better options. We’ve helped over 500 Australian businesses sort their HR without the full-time salary, and most of them wish they’d done it sooner.

What a Full-Time HR Manager Actually Costs

Let’s break down the real numbers, because the salary is just the start:

• Base salary: $120k to $140k (metro areas)
• Superannuation: $13.8k to $16.1k on top
• Payroll tax: $5.8k to $6.7k (NSW/VIC, if you’re over the threshold)
• Workers’ comp: $1.2k to $4.2k depending on your industry
• Recruitment fees: $15k to $25k if you use an agency
• Onboarding and training: $5k to $10k

Total first-year cost: $160k to $200k+
Ongoing cost after year one: $140k to $170k

And that’s assuming they’re good, they stay, and they don’t spend half their day forwarding LinkedIn posts about “bringing your whole self to work.”

One client of ours hired an internal HR manager who spent six months building a “culture framework” involving a 60-page handbook and mandatory trust falls. No one read the handbook. The trust falls just annoyed everyone. When they came to us, we saved them $80k a year by moving to a fractional model and actually getting stuff done.

The reality? Unless you’ve got 100+ staff or you’re in a high-risk industry (construction, healthcare, anything with heavy machinery), a full-time hire is overkill.

Option 1: Hire a Fractional HR Consultant

This is the smart money move for most Australian SMEs. You get expert HR advice on tap, without paying someone to scroll LinkedIn 40 hours a week.

What You Get

A specialist HR consultant handles everything from contracts and performance management to Fair Work disputes and making sure you’re not accidentally breaking employment law.

We work remotely or pop in when needed. You only pay for the hours you use. No salary, no super, no awkward Christmas party small talk.

What It Costs

• Hourly rate: $200 to $400/hour depending on complexity
• Monthly retainer (10 to 30 staff): $1k to $2.5k/month
• Quarterly audits + ad-hoc support: $3k to $5k per quarter
• Annual cost: $5k to $15k

Compare that to $150k for a full-timer. You’re saving $135k to $145k per year.

What’s Included

• Employment contracts and policy development (compliant with Fair Work, modern awards, NES)
• Performance management (warnings, improvement plans, termination procedures)
• Recruitment support (job ads, interview guides, reference checks)
• Employee relations advice (disputes, disciplinary stuff, workplace investigations)
• Fair Work compliance (award interpretation, enterprise agreements, flexibility requests)
• Restructures and redundancies
• WHS policy and compliance
• Manager training (how to have difficult conversations without stuffing it up)

Real Story: The Perth Logistics Company That Dodged a $50k Bullet

A Perth logistics company with 25 staff came to us in full panic mode. A former employee was threatening an unfair dismissal claim, and they were staring down a $50k payout.

Why? Because they’d followed “HR advice” from their accountant (who’s great at tax, rubbish at employment law). They hadn’t documented the performance issues. No warnings, no improvement plan, just a “she’ll be right” attitude and a termination letter that would make Fair Work cry.

We rebuilt their processes, coached them through proper documentation, and negotiated a settlement for $8k instead of $50k.

They now keep us on retainer for quarterly audits at $3k per quarter.

Total annual cost: $12k
Savings vs full-time hire: $138k
Savings vs the disaster they nearly walked into: $42k

Option 2: Outsource to an HR Company

If you want HR handled soup-to-nuts without ever thinking about it again, outsourcing is your best bet.

What It Means

You partner with an external HR company (like us) that acts as your on-demand HR department. You get access to a team of specialists without hiring anyone full-time.

What It Costs

• 10 to 25 staff: $1k to $2k/month ($12k to $24k/year)
• 26 to 50 staff: $1.5k to $2.5k/month ($18k to $30k/year)
• 51 to 100 staff: $2k to $3k/month ($24k to $36k/year)

Still way cheaper than a full-timer, and you get a whole team instead of one person.

What You Get

• Unlimited phone and email advice on employment law, Fair Work, awards, compliance
• Contract templates and reviews (compliant with NES, awards, state requirements)
• Policy development (WHS, flexible work, code of conduct, social media, complaints handling)
• Performance management support (templates, termination procedures, unfair dismissal risk assessment)
• Recruitment and onboarding help (job ads, interview guides, onboarding checklists)
• Employee relations case management (investigations, dispute resolution, mediation)
• Compliance monitoring (law changes, award updates, super rate changes, WHS regs)
• Manager training (performance conversations, managing difficult employees)
• Restructure and redundancy support (genuine redundancy tests, consultation, severance)

Real Story: The Gold Coast Hospo Group That Stopped the Revolving Door

A Gold Coast hospitality group with 60 staff across three venues was haemorrhaging money on turnover. 45% annual churn. Constant recruitment. Award compliance chaos.

We became their outsourced HR team. Rebuilt contracts, created venue-specific onboarding, trained managers on performance management, implemented retention bonuses.

Results:

• Turnover dropped from 45% to 31% in six months
• Award compliant across all venues
• Managers stopped making expensive mistakes

Monthly retainer: $2.2k
Annual cost: $26.4k
Savings vs full-time hire: $124k
Plus: Reduced recruitment costs (~$15k/year) and turnover costs (~$25k/year)

Option 3: Upskill Someone Internally + Keep a Consultant on Retainer

If you’ve got a sharp office manager or admin lead already doing half the HR stuff (just badly, because no one trained them), you can upskill them properly and keep an expert on retainer for the scary stuff.

How to Do It

Step 1: Run an HR health check to figure out what’s broken (we do free ones)

Step 2: Invest in training

• Certificate IV in Human Resources (TAFE): $1.5k to $2.5k, takes 6 to 12 months
• Short courses (Fair Work, ER): $500 to $1.2k per course

Step 3: Give them proper templates and processes (from your retained consultant, not the internet)

Step 4: Keep an expert on retainer ($800 to $1.5k/month) for high-risk stuff

What They Handle vs What the Consultant Handles

Total Cost

• Cert IV (Year 1 only): $1.5k to $3.5k
• Salary increase (10-15%): $5k to $8k/year
• Consultant retainer: $8k to $18k/year
• Year 1 total: $12.5k to $29.5k
• Year 2+ total: $11k to $26k

Savings vs full-time hire: $121k to $190k

Real Story: The Adelaide Engineering Firm That Built Capability

An Adelaide engineering firm with 18 staff had their office manager “doing HR” with contracts copied from her last job (completely different industry). We found 12 compliance issues.

We enrolled her in a Cert IV, gave her proper templates, and kept a $1k/month retainer for complex matters.

Results:

• She handles onboarding, leave, basic ER
• We handle terminations, restructures, complex advice
• All contracts and policies now compliant

Year 1 cost: $20k
Ongoing cost: $18k/year
Savings vs full-time hire: $131k to $182k

Option 4: The Hybrid Approach (Mix and Match)

Here’s the thing: you don’t have to pick just one option. Most of our smartest clients mix and match based on what they actually need.

Common Combinations That Work

Quarterly consultant audits + ad-hoc advice when needed

• Cost: $3k to $5k per quarter + hourly for urgent stuff
• Best for: Businesses with mostly stable HR, occasional issues
• Total annual: $12k to $25k

Minimal retainer + project-based work

• Cost: $1k/month retainer + projects charged separately
• Best for: Businesses that need regular check-ins but not constant support
• Total annual: $12k to $20k

Internal person for admin + consultant for everything else

• Cost: Salary increase + retainer
• Best for: Growing businesses building long-term capability
• Total annual: $15k to $30k

The point is: you design the support around your business, not the other way around.

Quick Comparison: Which Option Is Right for You?

Choose fractional consultant if: You need expert advice occasionally, budget is tight, 10 to 50 staff.

Choose outsourced HR if: You want ongoing comprehensive support, 20 to 100 staff, moderate complexity.

Choose internal upskill if: You have someone capable internally, planning for long-term growth, patient approach.

Choose hybrid if: You want flexibility and control over costs.

What Not to Do: The DIY HR Disaster

Look, we get it. Templates are free. ChatGPT exists. Your mate’s cousin “knows a bit about HR.”

But here’s the truth: DIY HR is how you end up in a Fair Work claim.

According to Fair Work Commission data, 40% of small business disputes happen because someone winged it with dodgy contracts, no documentation, or zero termination process.

Once you’re in a claim, you’re looking at:

• $10k to $30k in legal fees
• Months of stress
• Potential payout to the employee ($20k to $80k)
• Reputational damage
• The overwhelming urge to become a goat farmer

One business owner came to us after trying to fire someone using a template from a random blog. No warnings, no performance plan, just hope and vibes.

The employee lodged an unfair dismissal claim. The business settled for $35k.

We could’ve handled the whole thing properly for $3k.

Don’t be that person.

FAQ: Quick Answers

Next Steps: Get HR Sorted Without the Full-Time Cost

You don’t need a $150k salary on your books to sleep at night.

Whether you choose a fractional consultant, outsourced HR team, the upskilling route, or a custom hybrid approach, the key is to act before a crisis forces your hand.

Ready to sort your HR?

Book a free 30-minute consult with HR Gurus. We’ll look at your setup, spot the risks, and tell you exactly what to do next.

👉 Book your free consult here
📧 Email: info@hrgurus.com.au 

We’ve helped over 500 Australian SMEs get HR right without the overhead, the drama, or the full-time hire.

Let’s make yours next.

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