Home / Hiring Employees for Your Small Business / The Hiring Process / How to Build your First HR Department

How to Build your First HR Department

How to Build your First HR Department

By: Tessara Smith, PayScale.com

At first it seemed like your company was getting along just fine without an HR department. After all, the work that HR does is often easily outsourced and seems mundane in the grand scheme of things.

However, it is indisputable that certain work needs doing and tasks such as employee relations; compliance, employee training, payroll, and benefits administration are all vital functions of a business – as are other functions, such as onboarding, employee termination and keeping up with employee performance reviews.

Recordkeeping outside of the business can be problematic in itself, and issues such as conflict resolution simply cannot be handled using outside resources.

While outsourcing these tasks may have been a feasible solution for your company in the past, you have come to the realization that your business is probably better off handling these things internally. Your business is growing and evolving and with that you have recognized that the time has come for you to build your first HR Department.

How HR Has Evolved
Traditionally, HR’s purpose was to focus on determining who does what and to screen out the “undesirables” during the hiring process. Yet times are changing.

Over the past decade, HR has started to transition out of this cookie-cutter role. Today, there are huge variances in the tasks they handle. Some HR departments still perform standard roles, but many are responsible for a variety of business functions.

Before building your first HR department, you must first decide what tasks you want to hold HR accountable for, and most importantly, what you want out of your potential HR professionals.

HR Skills that Matter Most
When searching for your human resources managers, you should put your focus on seeking out candidates who have high-detail orientation, strong written and oral communication skills, and an open and pleasant disposition.

A senior-level HR professional should possess all of these basic skills plus additional knowledge about the nuts and bolts of HR — compensation, employment law, benefits management and design, and problem resolution skills. A qualified senior level HR pro-fessional should also be highly empathetic and possess strong public speaking abilities.

Integrating your New HR Team
Initially the introduction of your new HR team members can wreak havoc on other de-partments, especially when they first take on the tasks previously performed by other team members. Here are some pointers on how to introduce your new department without causing a major upset.

  • Be clear about why you need an HR department. If you don’t know why you need HR, then the process of creating a department is bound to be frustrating for everyone involved.
  • Prepare your managers. The tasks that your newly-hired HR professionals will be taking on may have been previously handled by your managers who have de-veloped their own systems of hiring, firing, and counseling employees. That makes it imperative to speak with your managers about why you are hiring HR professionals and stress that you need their full support of the new team members.
  • Provide Support. Your new HR department will need financial, technological and emotional support to get the job done. Financial support might come in the way of a budget that allows for continuing education, professional memberships, consultant fees, and monies for programing supplies.

Technological support may include a modern compensation management system and the training to go along with it. Even more important, however, is providing them with emotional support as HR works with management.

  • Set High Expectations. Set a high standard for your HR Department. Your new department should be reliable when it comes to responsiveness, trustworthiness, and accuracy. The department should regularly generate new ideas, initiatives, and programs that add value by driving employee retention, reducing risk and liability, increasing employee productivity and profits.
  • Be Inclusive. If HR is routinely excluded from significant discussions about work matters, it won’t take long for everyone to realize that the organization doesn’t re-spect the function. Once that happens, HR won’t have the credibility to influence outcomes.

There are many things to take into consideration when building your first HR department. If done correctly, your HR people will help your business to function much more efficiently.

Ultimately, finding qualified individuals who are motivated to learn the business and help employees thrive will prove to be critical in whether or not your new HR department sinks or swims.

Learn more about building a successful HR department or fixing an existing one in this new PayScale whitepaper.