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A Guide to Building an Effective HR Department

Setting up a HR department from scratch is a necessary step for all businesses as it helps organisations formulate policies and strategies that boost employee performance and ensure compliance with the law.

Reasons to Invest in an HR Department

Most organisations have a HR department, yet few understand that the duties of human resource professionals go beyond compliance and recruitment. An effective HR department can help an organisation achieve its goals and missions by developing policies and strategies that can assist the organisations growth.

  • More effective recruitment strategies: A company is only as good as the team behind it, and HR professionals are experts in recognising They will not only find ways to help attract the best quality candidates, but they can also create effective strategies to grow a candidate pool.
  • Reduced Turnover: One of the biggest problems large organisations have is retaining their best employees. This has a major impact on the foundations of the organisation and is also extremely costly.
  • Increase Employee Engagement: Essential to performance and productivity, employee engagement is often overlooked. But, employees need to feel motivated and that they are being kept in the loop at all times.
  • Ensure Compliance with Employee Law: Rather than continuously needing to go back to study employment law, it’s advisable to have someone who is employed for that specific

How to Start an HR Department

Starting a HR department is a pretty straightforward process. The first step is to develop your strategic vision about the company and its team; this often goes hand in hand with the company’s mission so look at how you can bring the two together. Developing strategies is more than just a prerequisite for success; it’s also a way to ensure the company’s smooth sailing.

The second step is to formulate policies that will guide the HR department. These are procedures that need to be fixed so that each time, for example, you need to hire someone new, you know exactly where to go and look for candidates. The more your policies are set in stone, the smoother you will be able to run your operation.

The last step is to ensure that you are in compliance with the law. Although some aspects of the law are pretty straightforward, it’s important to remain current and up-to-date with any changes as this will help protect your organisation legally.

Another aspect that is crucial to starting a HR department is building the HR team. Depending on the size of your organisation your needs will vary. However a fully-staffed department usually includes five people:

  • The Director of Human Resources: leader of the team who creates HR strategies and reports to upper management.
  • The Human Resources Manager: ensure the effective operations of the human resources team.
  • The Staffing Coordinator: responsible for recruiting, creating/updating job descriptions and scheduling interviews.
  • The Development Officer: creates training programmes to train new and current employees.
  • The Human Resources Generalist: as an entry-level role, this person helps with administrative tasks and helping out the director or manager.

HR Strategies

HR strategies are essentially the plans that needs to be put into effect for the organisation to achieve its goals. Although the human resources department is often only believed to be concerned with internal structure matters, the truth is that if it’s taken into account when planning organisational goals and vice versa, it can help boost performance and engagement.

As HR focuses on the organisation’s manpower and what it can do it needs to be consulted when planning the organisation’s targets because this will help generate more realistic goals. At the same time it will help boost employee engagement significantly which will make achieving those goals easier.


Developing HR strategies means taking into consideration different aspects of the department’s duties and formulating a plan that will allow you to achieve the best results. Aspects that you need to focus on include:

  • Recruitment: Nothing remains the same in the labour market for long so you need to be able to keep up with the trends, as well as boost your employer brand to attract the best quality candidates.
  • Employee engagement: It’s important to put a system in place that will help employees feel involved and rewarded as this will boost performance.
  • Retention: Being able to keep employees is more than just a cost-effective solution. It also helps create a positive company culture.
  • HR Consulting: Many organisations find that their HR needs are overwhelming. Luckily, there are many HR consulting firms out there that specialise in delivering the best results.
  • HR Analytics: More and more HR professionals are realising that using analytics can help make their job more efficient. From providing insight on how to effectively manage employees to helping you make smarter decisions during the recruitment process, the benefits of great software cannot be disputed.

HR Policies

Setting up a HR department from scratch will definitely be overwhelming at first. But, if you develop your policies methodically, they can deliver results for years to come. HR policies generally include a framework to allow you to put your strategies into effect, so it’s important to always take these two aspects of the HR departments work into consideration.

To make your policies as effective as possible you need to understand that employees should be put first. A people-centric approach to the organisation will help people feel more motivated to go the extra mile which can increase profits and transform any company into a leader in its industry.

You need to develop a concrete procedure that will allow the organisation to run smoothly. This means that you need to sit down with the people responsible for making decisions in your company and understand what they want to get out of each aspect of your work.

Compensation and benefits

Developing a policy that rewards employees for their contribution to the organisation is essential to motivate employees. A great compensation and benefits policy will include more than wages, whether it’s a sign-in bonus, daycare service for kids or lunch on a daily basis. It’s also important to note that performance rewards can also boost company culture, so consider adding an annual bonus for all employees to your budget.

Employee relations 

An effective HR department is not just a department that holds down the fort. It’s also a place where employees can go and confide their problems. Whether those problems are miscommunications with fellow employees or misunderstandings with their managers, it’s crucial that you provide employees with a supportive environment.

Employee placement

One of the many things that can get overlooked without an HR department is new employee placement. When a new employee enters an organisation, they will inevitably be a bit lost at first. But, it is HR’s responsibility to help the employee adjust. Helping a new employee understand the chain of command, as well as understand where they fit in and what exactly is expected of them will make adjustment easier.

Workplace diversity

Recruiting on the basis of diversity in the workplace is not just required by the law and the Equality Act 2010; it’s also a requirement for any workplace that wishes to have a broad spectrum of experience aboard. Diversity can contribute to making a team more effective in the decision-making and problem-solving process.

Health and safety in the workplace

Although many organisations have a separate health and safety department, this area remains one of the areas of primary focus for HR as it’s their responsibility to train staff to maintain the health and safety regulations of the company.

Training and development

Training and development is one of the main focal areas of HR as it is a function that boosts employee productivity and improves performance. For training and development to be effective, it should be seen as more than just an introductory step to people entering the company. It should be considered as a way to constantly update and sharpen skills.

Regulatory Compliance

Apart from formulating strategies and policies that will allow your organisation to achieve its goals, it’s also important to ensure compliance with the law. It’s essential for your policies to be up-to-date with current legislation as this will be more cost-effective and less time-consuming in the long run. Non-compliance with the law can have a negative impact on the business as a bad reputation can lead to loss of clients and contracts.


It’s important to consult a solicitor while you are in the process of finalising your policies as s/he will be able to ensure that all of your policies are in compliance with the law. Having said that, it’s important to take a look at the existing legislation and see how you can make your vision work.

Employee Handbook

Not only should your organisation have an employee handbook, but you should also ensure that it’s updated and amended whenever there is need. Don’t just introduce policies and not change your employee handbook as this will lead to confusion, while it might also cause you legal problems.

An employee handbook essentially functions as a guide to the organisation. It introduces new employees to the organisation’s culture, mission, values and what is expected of them. It also helps ensure that company policies are clearly and consistently communicated and that they are in compliance with the law.

HR Compliance Audits

HR Compliance Audits are an independent appraisal of your practices, and they allow you to identify areas of compliance and non-compliance. This will help you protect your organisation and it also allow you to provide a plan to mitigate risk.

Setting up a HR department from scratch needs careful planning and organising. Understanding the law and finding ways to comply is crucial it’s success and effectiveness. So don’t hesitate to consult solicitors and HR experts.


Source by: Mariliza Karrera – CarreerAddict.com

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