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Setting Up The HR Function

HR Question:

What are some things to consider when starting up an HR Department in my company?

HR Answer:

Before you set up your HR Department, the first question you need to answer is “why”? Why do you need an HR Department? Be sure your needs for the HR Department are business driven so that you can tie the functions of HR to your business strategy – mission, vision, objectives, values.

Your business reason’s for starting an HR department will dictate what you need to do. There are basically 8 key areas of HR that you need to think about:

  • Recruitment (job descriptions, application, posting, interview guides, evaluation form, offer letter)
  • Training and Development (new hire orientation, employee development)
  • Benefits and Compensation (pay structure, time tracking, medical, other perks)
  • Communications (all staff meetings, handbook, newsletters)
  • Employee Relations (manager training/coaching, discipline process, culture, retention)
  • Recordkeeping (employee files, reporting)
  • Health, Safety, and Security
  • Legal Compliance (state and federal laws)

Depending on your goals, you may need all or only some of these functions as you start up your HR department.  At a minimum though, you’ll want to think about:

  • Obtaining state and federal mandated posters
  • Creating Personnel Files for each employee
  • Creating an I-9 file to store all employee I-9s
  • Identifying key policies and procedures for your business
  • Developing an employee handbook to keep everyone on the same road map for expectations
  • Assembling the basic forms needed for all employees – I9, Emergency Contact Forms, W4, State Tax Form
  • Establishing a workers compensation account (varies by state)
  • Determining a process or solution for paying employees (in-house or payroll provider)
  • Assessing what benefits you will offer employees (not just medical coverage)

Finally, as you are establishing the HR Department, you’ll need to determine who is going to manage and run the department. How many staff will you need? The typical rule of thumb is one HR person for every 100 employees, but this varies. Who will HR report to? If your employees are valuable to you, HR would likely report to the CEO/President to ensure HR has the support needed to take care of employees.

Last but not least, don’t hesitate to ask for help. Laws change and people change. So you’ll always have a need to improve your HR function.

When you are in the infancy stage of an HR Department, oftentimes your “strategy” is to just get things up and running. There is so much to Human Resources Management that it can be difficult to know where to start while being confident you aren’t forgetting something important. Strategic HR, inc. feels your pain having helped many small companies start or grow their HR function. Let us share our years of experience getting HR “off the ground”. Contact Robin at