How to Hire an HR Director

The HR Director appointment is judged more harshly than most. Get it right and it is invisible — the organisation simply works better. Get it wrong and the cost surfaces a year later in attrition, tribunal exposure and plans that never quite land, by which point the cause is hard to trace back.

This guide covers when a business genuinely needs an HR Director, how the role differs from a Head of HR above and a CHRO below, where the candidates come from, what to test at interview and what it costs. It is written by Exec Capital, who place these roles across the UK.

What an HR Director owns

The HR Director leads the people function and is accountable for it operating well. In practice the remit divides into five areas, and few candidates are strong across all of them.

Employee relations and risk. Grievances, disciplinaries, performance management, consultation, redundancy and TUPE. This is where the legal exposure sits, and where an inexperienced appointment costs money quickly. Practical guidance on process comes from Acas, and obligations under the Equality Act 2010 run through everything the function does.

Resourcing. Recruitment, onboarding, workforce planning and the balance between internal capability and agency spend. In growing businesses this is often where the HR Director first demonstrates commercial value, because agency cost is usually both large and unmanaged.

Reward. Pay structures, benchmarking, bonus design, benefits and the job levelling framework underneath them. Businesses that have grown without a levelling structure typically have pay anomalies they cannot defend, and correcting them is an early priority.

Capability and development. Management training, succession below board level, and performance frameworks. Frequently the first thing cut when budgets tighten and the last thing to recover.

Compliance and administration. Contracts, policies, right to work, working time, statutory reporting and the HR system. Unglamorous and entirely unforgiving. GOV.UK sets out the statutory position for employers.

HR Director, Head of HR or CHRO?

Three titles, and the distinction is about where the role sits relative to decisions rather than the breadth of the remit.

The useful test is when the role enters the conversation. An HR Director takes a decision that has been made and makes the organisation capable of delivering it. A CHRO or Chief People Officer shapes the decision itself. Both are legitimate. Appointing a strategist into a function that needs rebuilding produces an expensive frustration, and it is the commonest mismatch we are asked to correct in this discipline.

When a business needs one

Headcount is the crude guide — broadly 100 to 750 employees — but four situations justify the appointment regardless of size.

Employee relations volume has become a management distraction. When operational managers are spending significant time on casework, or when the same issues recur, the problem is structural rather than individual.

Multi-site or multi-country operation. Consistency of practice across locations is genuinely difficult and creates real risk when it fails. Different sites developing different custom and practice is how businesses acquire liabilities they do not know about.

Acquisition activity. Integration is overwhelmingly a people exercise. Businesses that treat it otherwise tend to lose the acquired leadership team within eighteen months, having paid for it.

Rapid hiring. Doubling headcount without a resourcing function produces inconsistent hiring, inconsistent pay and a culture nobody intended. Correcting it afterwards costs considerably more than getting it right during.

Where the candidates come from

The generalist route. HR Business Partners and Heads of HR stepping up, usually CIPD qualified — the CIPD is the professional body and its qualification is the standard credential. Broad and dependable. Test commercial literacy specifically, because many have never held a budget beyond their own function.

Employee relations specialists. Deep expertise in casework, consultation and union relationships, frequently from manufacturing, logistics or retail. Excellent where ER volume is the driver. The gap is usually strategic workforce planning and reward design.

Reward and organisational design backgrounds. Strong on structure, levelling, benchmarking and pay architecture. Frequently the right choice where the business has grown without a framework. The gap tends to be front-line ER, which they may have delegated throughout their career.

Corporate HR moving to mid-market. Directors from large organisations seeking broader scope. They bring good practice and systems knowledge. The risk is adjustment — a business of 300 people does not have a shared services function, and candidates who have never worked without one sometimes struggle with the practical reality.

Writing the brief

Name the driver. ER volume, a restructure, an acquisition, rapid growth or the absence of any framework at all. Each implies a different first year and a different candidate.

State the reporting line. To the CEO signals a seat at the table. To the Finance Director or COO is common and workable, but candidates read it as a statement about how the function is valued, so be ready to explain the reasoning.

Describe the team, honestly. An HR Director inheriting two administrators is doing a different job from one inheriting a team of twelve with business partners in place. Both are legitimate; conflating them in a brief is not.

Say what is broken. If the last incumbent left badly, if there is live litigation, if the executive team is not aligned on the appointment — say so. Strong candidates are not deterred by difficulty; they are deterred by discovering it in week three.

Assessment: what to test

“Tell me about the most difficult exit you have handled personally. What did it cost and what would you do differently?”

Tests both capability and candour. Every experienced HR Director has one that went badly. Candidates who describe only clean processes have either been fortunate or are not answering.

“Describe a time you told the CEO they could not do what they wanted to do.”

The role frequently requires holding a line against commercial pressure. A candidate with no example has either never been tested or has learned to accommodate, and the second is the more common and more damaging.

“What was your agency recruitment spend last year and what did you do about it?”

A commercial question disguised as an operational one. HR Directors who think commercially know this number. Those who do not will describe the recruitment process instead.

“How would you know, in your first month, whether we have a pay problem?”

Look for a method — distribution analysis, benchmarking, comparing new hires against tenured staff in the same role. Answers about “listening to people” describe a temperament, not a capability.

“What would the last operational manager you worked closely with say about you?”

HR Directors succeed or fail on whether line managers trust them. Vague answers here are worth probing.

What it costs

Four factors move the number more than headcount does.

Sector. Financial and professional services sit materially above manufacturing, hospitality and charity for equivalent scope.

Ownership. PE-backed appointments frequently carry equity and a lower base. Owner-managed businesses tend toward base plus profit share.

Scope beyond HR. Roles combining HR with health and safety, facilities or ESG should be priced against the combined remit, not the HR element alone.

Location. The London premium is real and substantial, though hybrid working has compressed it somewhat since 2020.

Current benchmarks are in our directors’ salary guide, and the CIPD publishes broader reward research. For labour market context, ONS statistics are the reliable source.

How long the search takes

Ten to sixteen weeks from agreed brief to start date is typical.

Weeks one to two. Brief and search. The candidate pool is deep, which makes screening rather than sourcing the constraint.

Weeks three to five. Shortlist and first interviews — Exec Capital typically delivers within three to seven working days of the brief being agreed. Include an operational line manager in the process, not only the CEO.

Weeks six to eight. Second stage and references. References should test the manager relationship and the difficult-exit question specifically.

Weeks nine to sixteen. Offer and notice, commonly three months at this level.

Where the requirement is a restructure, TUPE transfer or integration with a fixed date, an interim HR Director is usually the better instrument — someone who has done it before, available within two weeks, without a permanent decision taken under pressure. Where the need is ongoing but below full-time scale, a fractional HR Director can build the architecture a first permanent hire would otherwise spend a year constructing.

Five mistakes to avoid

Appointing a CHRO when you need an HR Director. Title inflation attracts candidates expecting strategic influence into functions that need rebuilding. They leave.

Hiring during a crisis. An appointment made in the middle of a tribunal or a restructure is an appointment made for the next six months rather than the next six years. Use an interim and run the permanent search properly.

Excluding line managers from the process. The people who will rely on this appointment daily should meet the candidates. Their reaction is more predictive than the CEO’s.

Not testing commercial literacy. Covered above and worth repeating — it is the most common gap and the least frequently examined.

Concealing the state of the function. Broken systems, absent contracts, unresolved cases. It emerges in the first fortnight and it damages trust immediately.

Frequently asked questions

When should a business hire its first HR Director?

Commonly between 100 and 150 employees, or earlier where employee relations volume is distracting management, the business is multi-site, or rapid hiring is producing inconsistent practice. Below that, a Head of HR or HR Manager usually suffices.

What is the difference between an HR Director and a CHRO?

An HR Director leads the function and delivers against a strategy that has been set. A CHRO sits on the executive team and shapes the strategy itself, typically supporting the remuneration committee. Where both exist, the HR Director reports to the CHRO.

Does an HR Director need to be CIPD qualified?

Not as a legal requirement, and some excellent HR Directors come from employment law or operational backgrounds. CIPD qualification is the standard professional credential and most boards expect it, particularly where employee relations exposure is significant.

Who should an HR Director report to?

Ideally the CEO or Managing Director. Reporting to a Finance Director or COO is common in UK mid-market businesses and workable, but it tends to position the function as an overhead rather than a capability, and strong candidates will notice.

Should we use an interim HR Director instead?

Where the requirement is time-boxed — a restructure, TUPE transfer, integration or cover for a departure — an interim is usually better. They can start within two weeks and you avoid making a permanent decision under pressure.

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