People problems at a $1M to $5M company usually come in two kinds. Some are about the founder: how they delegate, give feedback, hire and handle conflict. Others are about the system: classification, pay, policies and records. Coaching fixes the first kind. A fractional CHRO fixes the second. Most founders at this size have some of both.
The running example
A founder runs a $3.5M design and engineering consultancy with 32 employees across three states. Pay was set one offer at a time. Two senior staff left last quarter, both saying they did not get feedback. There is no handbook beyond a document from year one, several long-term contractors work like employees, and the office manager handles HR alongside everything else.
When to get coached
Get coached when the main gap is the founder’s own management. Leadership coaching for founders covers giving direct feedback, running one-to-ones, delegating with clear expectations, hiring well and building a leadership team. Coaching is usually one-to-one, fortnightly or monthly, and programs listed here range from short paid calls to monthly retainers; group programs and peer communities cost less.
For our founder, coaching addresses the departures. Staff leaving because they got no feedback is a management habit, and a coach can help the founder and the two team leads build one-to-ones and reviews into the month.
When to hire a fractional CHRO
Hire when the system carries risk or the workload has outgrown the office manager. Signs: employees in several states; contractors doing employee work; pay that cannot be explained; no documented performance process; headcount heading toward 50, where new US leave and health coverage obligations begin; or a complaint that needs proper handling. A fractional CHRO at this size usually costs $3,000 to $6,000 a month.
For our founder, the contractors and the multi-state handbook are the triggers. Misclassification exposure grows with every month it continues, and a coach is not the right person to fix it. A fractional CHRO would run a compliance audit, reclassify where needed, write a handbook for the three states and build pay bands so the next offers are consistent.
When to do both
This founder needs both, and the combination is common. The fractional CHRO handles compliance, pay and process. A coach works with the founder on management habits. Some fractional CHROs coach the founder and managers as part of the engagement, which is efficient if they have the skill; ask whether they do. Others prefer to keep coaching separate so the founder has a confidential space to discuss the people they manage, including the HR leader.
Manager training is a third piece. Team leads promoted from individual roles often need it more than the founder does, and both coaches and fractional CHROs offer it.
A simple test
List your last five people problems. If most were about how someone was managed, start with coaching. If most were about pay, contracts, policies or legal exposure, hire a fractional CHRO. If both appear, do both, and fix the legal exposure first because it gets more expensive with time.
Fractional CHROs and leadership coaching programs are listed side by side on this site.