HR Manager’s Guide to Starting an HR Department from Scratch

 

HR Manager’s Guide to Starting an HR Department from Scratch

Starting an HR department from scratch can be daunting. This is especially true for startup companies that are yet to have established structures and workflows.

However, having an HR department is crucial for your business as it is tasked with hiring and retaining your most valuable assets—your employees. The HR team is responsible for recruiting new hires, onboarding, training, payroll, and other benefits.          

Let the infographic below be your guide on how to start an HR department from scratch. It will tackle the things you need when forming the team and how to utilize them.

What is the HR Department?

The HR team is the department in charge of the growth and welfare of the company because they handle the recruitment and screening of applicants, administration, benefits program creation, and government regulation compliance.

As the HR Manager, your responsibility is to form the basic structure of the HR department and the organization, if there is none yet, and make sure that everyone is aligned with the company’s culture. You will also be responsible for directing the day-to-day operations of the HR department involving recruitment, benefits, leaves, and onboarding.      

Functions of the HR Department

From employee benefits to company goals, HR is responsible for everyone’s needs. Below are some of the things the HR team provides to a company.

  1. Recruitment and training

The team will connect your business to potential employees by providing job descriptions on job boards—in short, they are responsible for finding, screening, interviewing, and hiring candidates. Once the new employee joins the company, HR is responsible for their training and onboarding and discussing company policies, regulations, and benefits.

  1. Payroll and compensation

Payroll and compensation are some of the more crucial parts of any business. Your department should create a compensation structure and ensure that everyone gets paid correctly and on time. Your company should determine when the employees will receive their salary along with their allowances (weekly, monthly, or every other week) and, eventually, their 13th-month pay.

  1. Compliance

Complying with government rules and regulations is essential for businesses, and HR is responsible for that. Ensuring the company meets health and safety standards and government-mandated labor regulations falls under this. 

  1. Employee-Employer relations

HR is responsible for setting up company programs or activities that strengthen the relationship between employer and employee. These activities can include company lunches, parties, and out-of-town trips. This is integral as it allows everyone to know one another and builds positive company culture and chemistry.

  1. People management

One of the primary roles of the HR department is to manage employees. With the importance of inclusivity and diversity in the workplace increasing, differing opinions may cause some to butt heads. HR should create conflict management and mediation programs that include meetings with HR to discuss a switch in job positions or benefits.

  1. Workplace policymaking

Any business must have a policy plan or handbook to prevent major issues if an employee makes a violation. This includes company rules and regulations that everyone should follow. 

HR is also in charge of drafting policies that make the workplace safer and more inclusive. There should also be a mechanism where erring employees can be meted out with disciplinary actions to discourage them from committing an offense. 

A Step-by-Step Guide on Starting an HR Department from Scratch

Starting an HR department from scratch can be difficult, especially since many companies have shifted their work to a remote setting because of COVID-19. If you are looking for ways to start an HR department, below are ten steps you can follow. 

  1. Decide on the organizational structure

Before recruiting people, you must first decide the organizational chart of the HR department. Do you want the fast-paced and innovative environment of the flat organization structure? Or do you prefer something more scalable, organized, and hierarchical? 

Each has its own strengths and weaknesses, so use your experience to judge which is the best for your department. For example, it is common for most HR departments to set up a team per job function like payroll, recruiting, and employee and labor relations. 

  1. Set a budget for your department

Now that you know what your department is supposed to look like, you can ask for a budget to start recruiting and investing in tools and equipment. If your company is starting from scratch, there is no previous data to compare your budget estimation. However, your assessment can include benefit-cost projections, projected turnover rate, and recurring training needs. 

  1. Create a plan for HR staffing

Your HR staffing plan must consider short- and long-term goals and budgets, so choose whether to have an in-house team, an outsourced team, or specialists to help the company. Manila Recruitment is a leading recruiting agency for talent source and HR staffing, making them the ideal business to partner with. 

  1. Outline regulations for tax and labor law compliance, health, and safety

One of the vital parts of any company is ensuring that the business meets government rules and regulations. As an HR manager, you should prepare legal documents such as tax forms, retirement plans, and health coverages. 

Aside from preventing any legal issues, this process ensures the safety of the company’s workplace, such as having the necessary fire safety procedures. Having more than one person in the team evaluating the regulations will be helpful. 

  1. Establish hiring and onboarding procedures

Before recruiting new employees, create a hiring and onboarding plan that includes the offer letter and employee agreement forms. This helps the employees understand their roles and responsibilities. 

Additionally, having a company playbook can help. The playbook should contain tips, lessons, strategies, and examples of what they can do in specific situations. They can easily refer to it if they ever get lost, making it an effective tool. 

  1. Create job roles and responsibilities for each department

Identifying roles and responsibilities is essential for any business as it clarifies what the employee should do daily. It starts with a well-written job post to bring in new hires. This way, each person will know what they need to do, leading to a structured and organized workflow. 

  1. Determine your compensation and benefits scheme

With the general structure of your organization and the projected number of employees now clear, your team should draft a competitive employee compensation scheme to attract and retain candidates. For this, you will need to consult industry experts, study salary guides, and monitor how much the competitors are paying so that your offer will be competitive.

Apart from the salary, you can give other benefits such as HMO plans, leaves, disability insurance, flexible spending accounts, and an employee assistance program. Having these extra benefits can keep your team happy and motivated. 

  1. Plan your approach towards employee record keeping

Managing people in a remote setting can be a challenging task. Fortunately, there are tools you can utilize. Software such as Slack and Trello can track how long each employee’s work took to complete.

  1. Create an employee relations strategy

As mentioned earlier, company relationships are an essential part of building a culture. As the HR manager, you need to create an individualized strategy for internal communications and how to engage with your team to prevent conflict.

Following up on them once a year is not enough. You should engage a few times monthly. This gives them a chance to inform you of their issues and satisfaction with their work. You can determine how to help your employees and make a better environment. 

  1. Draft your performance evaluation process

Having a draft of your evaluation process will help determine your team’s performance. An organizational chart with key performance indicators can be helpful in 1-on-1 meetings.

An example is having each employee’s profile to track their tasks, the duration of the task, and the quality of work. A Human Resource Information System can be helpful since it can automate these evaluations. 

Can You Build a Fully Remote HR department?

With the tools we have today, it is possible to build a remote HR department. Some of the benefits of having a remote team include work-life balance and safety because of the current pandemic. Additionally, a primary issue is the difficulty fostering a company culture and the absence of face-to-face communication.

Below are some ways to establish a proper remote HR department.

  1. Establish clear communication channels

Working in a remote setting will require a communication channel to allow managers to communicate with their team. You can set up a Google group chat or install software like Slack where everyone can communicate and share files. This makes the remote work setup more organized and efficient.

  1. Create a business playbook

In a remote setting, people cannot just approach someone as they usually do in the office. Having a business playbook is an easy way to provide answers immediately. This can also include situational examples, lessons, strategies, FAQs, and basic knowledge they need to remember.

  1. Employee monitoring tools

Having monitoring tools can help you keep track of your team’s progress while evaluating each individual’s productivity. One software that does both these jobs well is Trello. 

  1. Invest in remote working tools and equipment

Investing in working tools and equipment will benefit your team in the long run. Aside from essential software and hardware, you can provide your department with online subscriptions and channels to improve communication and work dynamics. 

It’s About Having the Right Tools and Management Skills

Having a remote HR department is possible. It is a matter of managing them efficiently and effectively. Providing them with the necessary tools can also enhance the team’s overall productivity.

While this is a vital aspect to remember, you need to consider cultivating a positive office culture. Everyone will be working remotely, so having a clear communication process is a simple step in imbuing company values within your team members.

Manila Recruitment is a top recruitment agency that provides expert-level consultation. If you have any inquiries, feel free to check out the website.


About Lawrence Barrett

Lawrence left the UK in 2010 after been headhunted to live and work in Shanghai in the financial services industry. Then in 2014 his company asked him to move to the Philippines to set up an office and establish a team to support our international business development efforts in the region and, like most people, he fell in love with the place. Lawrence always had an entrepreneurial mindset and so there was a burning desire to start a business he could call his own. In 2015 he decided to team up with a friend to start a business in the Oil & Gas industry that is centered around a globally patented pipeline sealing technology (The Halo Seal). As time went by he developed a close relationship with the Founder and CEO of Manila Recruitment and so in late 2017 he was invited to become an equity partner and to help expand the brand. And so here he is now, a part of the most dynamic headhunting firm in the Philippines. Connect with Lawrence Barrett on LinkedIn