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How to Build an HR Department from Scratch

Editorial Team
23/07/2023 9:17 AM

When building an HR department, you must get it right from the start since it can significantly impact the overall success of your business. Perhaps, your organisation has not had an HR department and has been operating at the bare minimum to get going. Or maybe you are just starting and wondering how to establish an HR team from scratch. 

While building an HR team can take up much of your time, it is well worth it. HR can help ensure compliance and plays an essential role in keeping your team productive and engaged. So, here's how to build an HR Department from scratch.

1. Start with a Strategy

When establishing an HR Team, it's crucial to focus on strategy and analytics. Strategy serves as the roadmap for solving the organisation's challenges using people-centric solutions. Such an approach requires HR input, highlighting the importance of recruitment, talent acquisition, compensation, and corporate culture.

A crucial thing to remember when developing strategy is that HR must generally show the organisation how things are done instead of doing it for them. The HR's function is to lead and establish people-centric strategies, supporting the company's objectives.

Without a strategy, HR is a mere administrative function, which could hinder the organisation's growth. A strategic company gives HR a seat at the table from the start, assigning roles like researching locations that are advantageous for employees and developing a long-term plan to network highly qualified candidates. 

Developing an HR strategy will require a closer look at the organisation's strengths, weaknesses, and opportunities. Such a process is known as the SWOT analysis. Talk to people within the organisation to understand the company's achievements, the products or services it is offering and what it wants to accomplish in the future. 

Next, evaluate the employees' skillsets by reviewing their performance, checking their resumes, and assessing their overall skill level. A crucial aspect of developing an HR strategy is analytics, from compensation history to employee engagement, turnover rates, and other metrics that can affect strategic decisions.

2. Create Policies and Procedures

An organisation has to operate within guidelines. Thus, a crucial step in developing an HR department is to create policies and procedures. These should describe the organisation's operations, how to execute the business and under which guidelines you expect employees to perform. 

Basically, HR policies and procedures serve as guidelines on how employees will execute their tasks in the company and what they can and cannot do in the organisation. These also serve as guidelines on the activities that employees can and cannot perform in the company, along with decisions they can and cannot make.

The policies can come in the form of a plain and high-level statement that formally briefs with an inclusion of the organisation's goals, procedures, and objectives to a specific area of the subject. It should specify the action required and define the standard parameters. The procedures should define the job process and state which tasks must be performed by whom. These should also include details on when to accomplish the job and the criteria for carrying out the tasks.

The organisation's policies can serve as a guiding principle to set a direction for employees. On the other hand, procedures are processes that everyone must consistently follow to help achieve the organisation's goals. When combined, the policies and procedures can help employees by directing them on their tasks and responsibilities.

3. Create a HR Data System

Another crucial step for creating an HR department is developing an HR Data System, a tool that collects and stores data of the organisation's employees. It can include personal details, payroll, benefits, training, performance, time, attendance, etc. The data that the tool gathers is valuable for making crucial decisions.

The HR Data System can provide a centralised repository of employee master data that the HR Department needs to accomplish its core functions. An effective HR Data System can help HR and organisations be more efficient. 

Aside from storing and managing data, the HR data system can process employee data, like names, addresses, Social Security Numbers, work permits, data of their dependents, and other relevant employee data. In some cases, it helps improve several functions in HR, from recruiting to applicant tracking, managing time and attendance, and performance appraisals. The tool can also come with self-service functions for employees. In some ways, the HR Data System can be considered a smart database that keeps employees' information.

An efficient HR Data System can breathe new life into the HR processes and procedures. While the benefits can vary depending on the system, some of its key benefits include helping expedite HR tasks, reducing paperwork, and improving the HR Department's productivity.

More importantly, the HR Data System can help maintain business compliance. HR tasks are highly regulated and have little to no margin for error. HR Data Systems are equipped with monitoring capabilities designed with compliance regulations in mind, helping organisations to stay compliant and avoid legal issues. 

4. Turn to HR Recruitment Specialists

Consider turning to HR recruitment specialists who can help build an HR Department from scratch. Instead of training everyone on the team, you can focus on the more crucial issues of your business and rely on specialists to manage HR-related tasks.

One of the challenges of building an HR department is looking for the right people. Of course, you want to hire the best talents. Turning to HR specialists can curtail the challenges of finding talented professionals who meet your requirements. 

Outsourcing your HR can help you save resources that can help to expand your business. With their help, you can free yourself of the burden of hiring and managing an in-house HR team. As a result, you can focus your time and efforts on the more crucial business functions.

The HR Recruitment Specialists can also help to smoothly onboard new hires by taking charge of orientation, training, and all things involved in onboarding. All that's left for you to do is conduct the final screening.

Editorial Team


This article was written by one of the consultants at IPC

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