Setting up an HR department from scratch

There is something beautiful about the task, when one person is responsible for all HR processes within a company.

There are many opportunities in addition to the many difficulties; that's not a question.

I know, I've been there. Started as a one-man show. However, it gave me the most fantastic opportunity: to build an entire HR department!?

Not so long ago, I got an exciting opportunity: I became the HR Manager of five companies - without a dedicated HR department. The basic HR responsibilities were sprinkled around, like confetti across various functions and departments.

Let's be honest: it was a mess. ??

After taking a deep breath, I assessed the situation step by step:?

Uncovered the who, what, and how.?

While hiring and maintaining staff was paramount, I simultaneously zoomed out to capture the bigger picture: understanding the company's overarching HR goals and needs.?

A holistic HR strategy was born with my newfound knowledge and insights.?

As a result of two years of work, a multi-person HR department was created, which performed all HR functions in the life of the five companies.

Based on this massive experience, I advise you to follow this step-by-step guide if you need to set up an HR department:

1. Determine the need for HR:?Recognise the organisational requirements. To understand the business is essential. Ask big questions: Where comes HR into the picture supporting business goals? Does the company size require a full-fledged HR? What existing operational challenges can HR address? Compare the company's expectations with the possibilities, which will form your strategy's basis.
2. Establish clear objectives:?Enumerate the critical goals for HR. Is it recruitment, benefits administration, or a sprinkle of everything? With clear goals, you will not only make your own work easier, but it will also be clearer to others what you want to do. Trust me, a guide you can turn to on difficult days is always useful.
3. Allocate resources:?Create your budget. You can view similar expenses from previous years, even if they were not under the HR cost centre. You can ask for advice from other HR managers or companies, and request quotes for a few larger items (for events or training sessions held by an external trainer). Are you planning to downsize? Do you need to hire a lot of new people? Are you planning a large-scale event for the given year? Need to introduce a new system? Run all the questions to create a better-detailed budget plan. And be good friends and co-operate with finance, they can give you a lot of information for this task. Always take into account immediate needs and future growth, and leave a little extra room for special occasions.?
4. Hire HR professionals:?Plan to extend the HR department by time. Create a detailed list of tasks to determine what role can do what. Then, when the time comes, bring on board seasoned experts to drive your vision.
5. Create an HR Strategy:?Lay out your game plan. From staffing plans to diversity goals, have a clear vision for the future. I created a holistic HR strategy that included sub-strategies like retention, recruitment, etc. and a step-by-step guide that was strict but, from time to time, adapted to the situation and needs that arose.
6. Implement HR systems and tools:?Tech up with tools like HRIS for administrative tasks, Performance Management tools for feedback and evaluations, and LMS for training needs. Develop a career site; introduce an online platform where colleagues can access all HR-related documents (policies, guides, templates) and information (org announcements, org charts, etc.). It can add hours to your days.
7. Develop HR policies and procedures:?Standardise your processes as much as possible. Ensure everyone's on the same page regarding hiring, compensation, and even safety protocols. If necessary, utilise legal help to ensure legal compliance.
8. Set up onboarding and training plans:?Ensure a smooth entry for your new hires and keep them updated with regular training. The first days are the most critical days in the life of a new colleague. Involve other departments in your integration process, make written documents available, organise a mentor for the new person, and help them see and feel that they are a valuable and essential team member from day one. This can make your work easier for the future: it can reduce the attrition rate, recruitment activities, and costs arising from the replacement.
9. Implement performance management:?The introduction of the performance management system can provide an opportunity to harmonise and connect salary increases and bonus plans so that a much more sophisticated and self-functioning system can be implemented in the long term.
10. Foster employee engagement:?A happy employee is an asset. Work towards fostering a positive environment and open communication channels.?Continually add new things to your engagement toolbox, listen to your colleagues, and find out their real needs so that you can start tailored programs, ensuring that your colleagues feel good and engaged.
11. Stay updated on labour laws:?Know the employment law back and forth. Get training on local regulations, be up-to-date on changes, and look for procedures related to similar legal matters at other companies. Always ensure your policies align with local, state, and federal regulations.
12. HR scorecard:?Measure, measure, measure! This strategic tool, which aligns HR initiatives with the broader organisational goals and measures the efficiency, effectiveness, and impact of HR practices on the company's performance, will be your best ally! You have to speak the language of the business, which is numbers and impact!

To sum it up:

• Recognise & Respond:?Understanding the need is half the battle. Always recognise what the organisation truly needs and tailor your approach accordingly.
• Strategies:?Never step in without a plan. Your strategy is your roadmap to success.
• Equip & Empower:?Equip your HR with the right tools and empower them with clear policies and procedures.
• Engage & Evolve:?Foster a culture of engagement. And remember, the only constant is change. Evolve your practices as you go along.

Setting up an HR department is a challenging task; however, it's akin to creating the heartbeat of an organisation.?

As HR professionals, we wear many hats and juggle countless responsibilities, but above all, we shape the soul of our companies.?

Ready to revolutionise your own HR landscape?

Let's share and learn together.

I write about strategic HR management, providing insights to empower HR professionals to turn HR into an integral driver of business success. Follow me for actionable strategies and future-forward HR perspectives!