How Do I Set Up A New Human Resource Department?

by Richard P. Dacri

If you were given the task of setting up a new Human Resource Department in a small company where would you begin? Such a task would be extremely daunting, but not impossible, if you follow a few tips. To begin, you need to answer some basic questions:

Why do you want to set one up? What’s changed to make you or the organization believe that an HR department is needed now? What do you want the HR department to do? How will this function contribute to the success and bottom-line of the organization? Will it add value?

In other words, before you begin the task, you need to have a clear definition of the mission and goals of the department and secondly, what role you will play as “head” of the HR function. Once you have clear direction, there are some key “audit” issues that you need to focus on.

Do you have personnel files on all your employees? Are they current? Do you have all the legally required documentation? Do you have items in the files that don’t belong there?

Do you have policies and procedures? Are they up-to-date? Are they followed? Do you have an employee handbook? Do you have the right language in it? Have you inadvertently created a contract between you and your employees? Do you have policies dealing with ADA, EEO, FMLA, sexual harassment, workers’ compensation, safety, benefits, discipline, etc.?

Are you in compliance with state and federal regulations? Do you have a working knowledge of the law? Do you have all the required postings, forms, and documentation required by the respective governmental agencies? Are all the managers aware of their legal responsibilities and liabilities?

Are you recruiting and selecting the right people? Are you aware of the talent and skills needed to move your organization forward? Do you know where to find these people? Are you recruiting in a cost effective manner? Are your managers trained in interviewing techniques?

What kind of compensation plan do you have? Is it meeting the organization’s needs? Is it motivating your employees? Is it competitive and fair? How about your benefits? Are you getting the best coverage for your people at a price the employees and the organization can afford? Is your total compensation attractive enough to retain existing people and be an incentive to new people?

What’s it like working at your company? Are people productive and motivated? Are you looking at the indicators of a productive and motivated workforce (absenteeism, tardiness, turnover, grievances, high workers’ compensation rates, poor quality, missed deliveries, and poor productivity)?

What about your training? Are manager’s and employee’s skills current? Is training a “way-of-life”? Are you growing your people or do you have to go to the outside every time you need someone with a specialization? Are supervisors effectively managing their employees?

Are managers and employees kept informed? Do they know what’s going on? Is the grapevine the main source of communication? What are the sources of communication?

Obviously it is impossible to make a complete guide of things you need to consider when starting a new HR department in a small company. However, these are some of things you should consider. As you begin the process, get some professional help, whether through networking with peers, other organizations, or outside expertise. It is a big task, but one that is critical to the organization.

Rick Dacri is an organizational development consultant, coach and featured speaker at regional and national conferences. Since 1995 his firm, Dacri & Associates has focused on improving the performance of individuals and organizations. Rick can be reached at 1-800-892-9828, or rick@dacri.com