Fred Wilson on his Monday MBA post is talking about Human Capital or personnel or talent. The term changes but basically it's about "Finding/attracting the right key people" to grow your business.
"Half the process of hiring is figuring out what job you are really hiring for."
In a growing business, many roles morph over time. Sally may have started as an admin, but she may be doing payroll, sales assistance, purchasing or a number of other duties that may not be in your (unwritten) job description. If Sally leaves, you aren't even close to hiring the right person, because you don't really know what Sally does. Every employee should be writing/updating their job description. Or, at the least once a year, do a performance review you where you document her responsibilities.
It's not just the hiring process either. There is also the Firing. And the laws, benefits, payroll, workman's comp insurance, unemployment, etc. One way to handle that is to use a PEO or ASO model, whereby your entire office is "sold" to someone like ADP who handles all your payroll, benefits (including group health), insurances, and human resources position for about 5% of payroll. It's just an option.