HR · 19 July 2021

How to start a HR Department from scratch

Are you a total novice when it comes to HR? Or are you tired of working for everyone else? Maybe you want to build your own HR department for your current business which is expanding? Whatever your reason, you have landed here because you want to start an HR department from scratch.

Remember, every HR professional started somewhere so someone was responsible for fine-tuning most of the HR departments around today. In this post, we are going to give you some simple to understand tips in getting a brand new HR department off the ground and up and running. 

Starting an HR department from scratch when your company is in its infancy gives you a unique opportunity to shape the company culture exactly how you want it. Below are our 6 steps to getting your HR department off the ground…

Step 1: Determine the specific job roles and responsibilities

It might sound like this is stating the obvious but, the imperative part of starting your HR company from scratch is to create specific job roles & responsibilities. If employees know exactly what their responsibilities and roles are in the company, working, communication and productivity are more efficient and work becomes organised. You will all be singing from the same sheet. 

Step 2: Decide what the organisational hierarchy is

Supervision is key when it comes to managing employees and organising departments. Establishing a company hierarchy ensures employees know who they need to report to and who will be supervising which job roles. The company will also require the creation of different departments in order for employees to be managed effectively. For example, a large gym company could have a gym team department, a front of house department and a sales department, all with their own supervisors etc. For a new company having an organisational hierarchy is extremely important in the smooth operation of job roles. 

Step 3: Establish what the hiring policy is

The company is ultimately represented by the people that work there; the employees. The employees are the face of the company and the forefront of the customer experience. It is crucial to ensure you know exactly who you are hiring, why you have hired them and how you go about hiring employees. While you are establishing your hiring policy you must follow the below protocol:

  • Publish a clear and detailed job description for every job role – This will help you to narrow down applicants who match the skill-set the specific role is demanding. 
  • Employ those candidates for the desirable skills they have – You also need to make sure the employees are culturally fit for the company.
  • Lastly, you need to craft a job appointment letter. This letter should detail all the terms of employment for the specific role. This tries to ensure that there will be no disagreements or confusion in the future with what is expected of the employee in the role.

Step 4: Pay, compensation and increment

When it comes to employee motivation pay, compensation and increment are often the biggest lures. In order to retain the most skilful and hardworking talent, you need to ensure that the company is providing fair compensation and pay to its employees. From an HR point of view, there are many things that need to be conside3red while effectively managing the payroll and increment. Some of these include:

  • Do your market research and determine how much it is you can offer a certain job role in terms of salary etc. Don’t be afraid to spend a little more here if you feel as though you have a really valuable candidate for the role. 
  • Look into creating a compensation structure that can include things like medical fees, transport and house rent to name but a few.
  • Create a salary circle as this will mean that all of the payroll processes can be completed on time. 
  • Establish an increment policy that is fairly based on performance and length of time. 

Step 5: Keep track of employees performance 

For example, regular appraisals, meetings and reports on how the employee is performing will also give them a chance to voice their concerns. As we have discussed increments based on employees performance, you will need to determine how you are going to measure employees performance. You should create a system where you can fairly analyse an employees performance in the role after a certain length of time. The point here is to keep employees motivated and the business progressing, the two go hand in hand. 

It is also important to mention here that a reward or bonus system should be put in place because those employees whom are regularly achieving high standards and exceeding expectations. Such employees will go and find their worth somewhere else if they don’t feel appreciated where they are. Acknowledge your employees’ achievements Reward your employees and they will reward you. 

Step 6: Human resources management software 

Starting an HR department from scratch doesn’t come without its challenges, but being organised and being able to access, store and manage data efficiently is one of the key aspects of running an HR firm. You should look into investing in some good quality HRM software.  

Such software could potentially store all your employee information, performance reports, activity, attendance and leave entitlement/management to name but a few. A good software system could also help with managing payroll, which could be a hellish ordeal if done manually. 

To conclude:

Nobody said it was going to be easy. When it comes to setting up and running an HR department you can’t afford to cut any corners. The HR department is the most crucial part of running any business, you can see it as the heart of the business, it would be impossible to function without it. Manage it well and you will have a business that runs efficiently.

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