Building an HR Department from Scratch in Construction: How to Organize Teams and Assign Codes?

Dear Seniors,

Earlier, I used to work in an IT Company. I have newly joined as an HR Manager in a construction company where there was no HR Department. None of the processes are systematic here. There are only paper records. No soft copy of any important documents.

I am in the process of constructing the HR Department and making the processes systematic. I went through many postings on Cite HR and decided to start with preparing the hierarchy chart, departments, assigning designations, and employee codes. I have received consent from my boss to move ahead with this. However, I need your help in this.

Question 1: As of now, there are only accounts, admin, HR (after I joined), and marketing departments here. However, there are site engineers, site supervisors, project engineers as well. But I am unaware of what department they will belong to. Please suggest what departments can be created for a construction company. I have planned Business Development and Customer Service. What about those people on-site as mentioned above?

Question 2: Also, how to assign employee codes? Is there any system to follow?

I am looking forward to your help as I am completely unaware of the construction field.

Regards,
Revathi Pillai
Manager - HR
RMS India

For question no. 2 - You can assign numbers starting from one based on the date of joining.

Kavitha

Hi Revathi,

For construction, you have the following departments:

- Planning: You have a planning head and executives.
- Quality: Quality head and executives.
- Materials and Purchase Department.
- Customer Service Executive (This person follows up on collections and interacts with existing customers frequently).
- Marketing Department.

The project head may come under the Projects/Operations Department.

Thank you very much for your prompt responses.

Asha, I have a question regarding the site supervisors, storekeepers, etc. Which department would they fall under? Will they also be considered part of operations?

Regards,
Revathi Pillai

They will come under the Projects Department. Site Engineer, Site Supervisors - all of them. That is, they will report to the project head.

Thank you, Ms. Asha, for your prompt reply. I will consider your points and create departments accordingly.

I also want to take this opportunity to tell you that you have been a very active member of this site. All your replies are sensible and logical. I truly appreciate your contribution as it has helped me many times.

Thanks once again.

Regards,

Revathi Pillai Manager - HR RMS India

Thank you, Ms. Asha. Please continue assisting me as the establishment of an HR Department is a complex process that requires the guidance of experienced professionals like all of you.

I would also like to express my gratitude to Ms. Kavita and Mr. Shijit for their timely responses.

Regards,

Revathi Pillai
Manager - HR
RMS India

Hi Revathi,

You have already received valuable ideas above. Just adding on, a construction company can also have the following departments (self-explanatory) to name a few:

- Civil Department
- Architecture Department
- Project Cost Evaluation Department
- Project Administration
- Budget Management
- Construction Waste Management
- Labor Department
- Safety and Health Department
- Legal Administration Department
- Engineering Department

I hope this helps.

Dear Ms. Kavita,

Thank you for your valuable input. Some of the departments you mentioned are crucial for our future needs, such as the Safety and Health Department and the Legal Department. Could you please explain to me what the Labor Department entails? Is it connected to handling labor grievances?

Regards,
Revathi Pillai
Manager - HR
RMS India

Yes, Revathi, it would also cover the various Acts such as the Industrial Disputes Act, Minimum Wages Act, Workmen Compensation Act, Building & other construction welfare acts, etc.

In the future, you can also have a Training & Employment department to meet the recruitment of skilled engineers/workers for your firm.

You can also distribute the project into Mechanical, such as fabrication, designing, and civil. This will make it easier for the HODs to distribute and evaluate performance. Ensure that each HOD should have no more than 7-8 people reporting to them.

The material supervisor and all staff come under the warehouse. You can have a purchase manager and a head for the warehouse, or you may opt for a manager of materials. Another option is to have separate roles for a warehouse manager and a purchase manager.

I believe your work might be at different locations, so you will need an administrative person to oversee day-to-day activities. Additionally, you should have a person for liaising and for ensuring statutory compliance. As you expand, you may need to cover more areas; you can add sections as needed accordingly.

Thanks and regards,
Kameswarao

Dear Ma'am,

I also work in a construction company. When I joined, the first thing I did was prepare a master database of all the employees. I sorted the employee numbers based on their date of joining.

I maintain my MIS in the following ways:
1) Grade-wise
2) Location-wise
3) Department-wise
- Admin
- Systems
- Legal
- Liaison
- Finance & Accounts
- HR
- Marketing & Business Development
- Projects & Execution
- Procurements & Contracts
- Top Management

I have included other support staff in the admin department only. In my opinion, the projects department should consist of all designations like project managers, engineers, site supervisors, etc. Only Tendering & Procurements may be considered as a separate department and may not be included in projects.

Regards,
Niraja

I am surprised to know that being an HR Manager working in such a responsible position, you don't even know the basics of HR management and have to seek the help of novice trainees from Citehr. Do you think this internet-based advice will work? I bet you it is impossible to implement because without a proper understanding of business processes and key core business verticals, you cannot simply create departments and decide what fits into them.

This shows your inexperience. I sympathize with you, but you must first learn about the business processes of the construction industry and your organization's structure. Then, discuss with your key department heads and come to a final conclusion. Discussions in this forum are not the solution. You will find the solution within your organization because every organization is unique with its own business model, delegation of authority, and span of control.

Rashid

I am surprised to know that as an HR Manager working in such a responsible position, you don't even know the basics of HR management and have to seek help from novice trainees on Citehr. Do you think this internet-based advice will work? I bet you that it is impossible to implement because without a proper understanding of business processes and key core business verticals, you cannot simply create departments and decide what fits into them.

This shows your inexperience. I sympathize with you, but you must first learn about the business processes of the construction industry and your organization's structure. Then, discuss with your key department heads and arrive at a final conclusion. Discussions in this forum are not the solution. You will find solutions within your organization because every organization is unique and has its own typical business model, delegation of authority, and span of control.

Rashid :ph34r:

Dear All,

Can anybody help me out with some difficulty that I am facing while preparing the Operations department? Actually, we have 2 to 3 sites, and each site has site supervisors, site engineers, etc. Now, how can I prepare the Operations department? Shall I split it on the basis of sites? But if I do so, then it will be a temporary solution as sites will be closed and new sites will open. Please help.

Regards,
Revathi Pillai
Manager - HR
RMS India

Dear Revathi,

These sites will not be permanent. It's just that for the current projects, they have assigned specific site engineers and supervisors. After 6-8 months, they will move on to other projects. So, I don't think you will have to have departments for separate sites. They will all have the same responsibilities. (I guess you meant the site as current projects).

Hi Revathi,

Today, I happened to see your question about HR for a construction company. Normally, the company has higher management, middle management, and down-the-line operations in the following structure:

Construction Company:
Directors-Technical - They are fully responsible for the entire operations of the company, including acquiring contracts and deciding whether to tender or not. They check the estimation with the Contracts Manager, and decisions are made at the Board Meeting with all directors. Finance and banking matters are discussed with the Finance Director and the Board of Directors. The Contracts Manager is generally not involved in Corporate Finance. However, once the finance is allocated to the project, they must ensure that the project is executed and generates enough revenue to cover costs.

Director-Finance - Under this position, there are roles such as Finance Manager/Chief Accountant, Assistant Accountant, Cost Accountant, and Data Entry Operators.

General Manager:
Manager - HR & Operations.

Project Departments: Civil, Mechanical, HVAC, Plumbing, Electrical & Instrumentation, etc.

First Comes:
- Tendering & Estimation
- Planning
- AutoCAD & Design
- Procurement - Purchaser
- Construction/Contracts Manager
- Project Manager (one for each project if the project is large) or Project Manager for each division of activity
- Site Engineers (one or more for each activity)
- Site Accountant/Cost Accountant/Project Accountant (one or two, with assistants as needed)
- Site Supervisors
- Foreman
- Draftsman/Draughtsman - AutoCAD, PrimaVera
- Storekeeper
- Safety Officer
- Workforce - Mason, Carpenter, Drivers, Forklift Operators, Duct Erectors, Plumbers, Fabricators, Welders, Electricians, Air-Conditioning Mechanics, General Workers, Helpers, Office Boy/Tea Boy
- Security Personnel

To create a company organization chart to understand the hierarchy, considering the line of work undertaken by the company, additional categories of people may be added, each with specific responsibilities.

Attendance Card: I used to create different colored cards for major labor forces like Plumbing, Electrical, Civil, etc., to easily identify workers without looking into details.

Company Policy for Attendance: Daily wage workers get paid for the days they work. Monthly incentives are provided based on the number of days worked, encouraging attendance and ensuring work continuity.

Yearly Leave: Employees are entitled to 15 days of paid leave annually, calculated based on total days worked.

Employee Records: Maintaining up-to-date biodata, family details, contact numbers, and nomination forms for employees to ensure smooth processing in case of emergencies or changes in status.

It is important to update these records yearly and allow employees to make changes as needed.

Hi Revathi,

Today I happened to see your question about HR for a construction company. Normally, the company has higher management, middle management, and down-the-line operations:

Construction Company:
Directors-Technical - They are fully responsible for the entire operations of the company, including acquiring contracts and deciding whether to tender or not. Estimations are checked with the Contracts Manager, and decisions are made at board meetings with all directors. Finance and banking matters are discussed with the Finance Director and the Board of Directors. The Contracts Manager is generally not involved in corporate finance. However, once the finance is allocated to the project, they must ensure that the project is executed successfully to generate revenue to cover all costs.

Director-Finance - Under this position, there are roles such as Finance Manager/Chief Accountant, Assistant Accountant, Cost Accountant, and Data Entry Operators.

General Manager:
Manager - HR & Operations.

Project Departments: Civil, Mechanical, HVAC, Plumbing, Electrical & Instrumentation, and more.

The organization structure involves various roles from tendering and estimation to planning, AutoCAD & design, procurement, construction/contracts management, project management, site engineers, accountants, supervisors, foremen, draftsmen, storekeepers, safety officers, workforce consisting of various trades, and support staff like office boys and security personnel.

Attendance Card: I used to create different colored cards for major labor forces like Plumbing/Electrical/Civil, allowing easy identification of the worker without detailed inspection.

Company Policy for Attendance: Daily wage workers get paid based on the days worked. A monthly incentive is provided based on the number of days worked, encouraging attendance and ensuring work continuity.

Yearly Leave: Employees are entitled to 15 paid days off, calculated based on total days worked per year to determine their entitlement.

Employee Records: Maintaining updated biodata, family details, contact information, nomination forms, and relevant records for all employees is essential for smooth operations and legal compliance.

I hope this information is useful for you to explore further as needed.

Regards,
Rama
Chief Accountant
Construction Company

Great content, Mr. Rama.

I have a clarification that can benefit Revathi - Won't AutoCAD and Draftsman come under the planning department?

Hey Revathi, why don't you prepare something like this and then get more input:

Like:

Planning Department

Head Planning

Sr. Planning Executive / Planning Executive

Draughtsman / draftsman

Architects - (if you are not outsourcing this, I guess they come under planning - but please check)

Likewise for each department, chart it out. You may get additional input from expert HR professionals in the Construction Industry.

Dear Mr. Rashid,

I respect your inputs and expertise. You should also note that when our superiors want some work, then we should do some spade work and go to them to discuss; only then can they add some more potential inputs. Beginning is very critical, and I appreciate Ms. Revathi's initiation in understanding things she is not well-versed in. We, as HR professionals, are known for our people orientation, and we should support our friends who are in the same fraternity instead of criticizing; critique is better than criticism. I value your inputs, saying that she should do the spade work within her organization. At the same time, I also expect that you will support people in the future instead of hurting them.

Ms. Revathi, an organogram needs to be prepared as a whole. At each site, there may be people under different verticals. You should prepare a two-way reporting structure, i.e., administratively, all the people will report to the site in-charge, and functionally, they will report to the concerned HOD. Otherwise, it will be difficult for the site in-charge to manage the operations as they will be responsible for the Profit and Loss account of that particular site.

For example, HR/Finance & Accounts/Purchase personnel will be at each site and will report to the site in-charge for day-to-day administrative purposes. For functional purposes, they will be (in a dotted line) reporting to the functional heads. Please prepare the structure for one site and replicate the same for all sites. This will become a standard operating procedure (SOP) and provide utmost clarity across the organization.

I believe you are clear; please feel free to post your doubts until you gain clarity. You can also obtain contact numbers of people whom you find resourceful, interact with them, and gain expertise. We all started our careers like this, and now we are able to provide inputs to those in need. Nobody in the world is 100% perfect, and if anybody feels they are...

Thanks and regards,
Kameswarao

Ms. Rama,

Thank you for your detailed explanation. I am now almost clear with the functioning of a construction company. Thank you once again.

Regards,

Revathi Pillai Manager - HR RMS India

Ms. Asha,

The reason why I am planning not to create a Planning department as of now is that ours is a growing company. There is no one who handles the planning part. So I am planning to develop the following departments: HR, Admin, Accounts, Finance, Commercial (which will include the materials and purchase), Operations (which can include Site engineers, supervisors), Business Development, Marketing, and Customer Service (which will include Client service engineer).

However, the problem is with the Operations department as we have a factory also which has a factory manager. Is it sensible to include them in Operations or need to create a department as Production?

And thanks to Mr. Kameswarao for your support as I was a bit upset by reading that posting. Anyway, I am planning to not create a site-wise org chart as we have Admin, Finance, and Purchase centralized. Also, the laborers are on a contractual basis. So, I feel I need not include them in the chart. Please correct me if I am wrong.

Regards,

Revathi Pillai
Manager - HR
RMS India

Hi Revathy,

I would like to clarify. You had mentioned that it was a construction company. The kind of setup that I worked with was for a promoter (you see here we outsource architects and laborers for a project). So there was no question of a Factory Manager involved. May I know what exactly the plant is focusing on? Do you have construction materials too? Can you explain what kind of service your company provides? This will help others give better ideas.

HR & Admin can be one department (just a suggestion). Finance can be another department, and accounts executive can come under that.

If you have a separate factory that produces construction materials, it is considered a different activity, and the Factory Manager is responsible solely for that factory. The Factory Manager holds a distinct role.

In my opinion, instead of having Operations Managers, you should appoint the chief of all projects as the Works Manager and each project head as a Project Manager. This restructuring would enhance clarity and efficiency.

Even if you have contract and casual laborers working on sites, it would be beneficial to establish a structured organogram for each site to streamline operations.

Thanks and regards,
Kameswarao

Dear Revathi,

You can also develop a department called Supply Chain Management where the following divisions will be established:

1. Inventory (Storekeepers/Store Assistants/Inventory Controllers/Stock, Material-related activities)
2. Logistics (Fleet Manager/Fleet Admin/Transportation/Drivers/Service, etc.)
3. Product Availability (Material purchasing/Ordering - purchase-related)
4. Project Division (Site Engineers/Supervisors/Project-related/Customer Care)

If you wish to combine Logistics and Project, you can create a Service Centre Department where all logistics and project activities will be consolidated.

Best regards,
Jaleel
Dubai

Ms. Asha, basically, our company provides construction materials, i.e., steel mainly. However, recently, it has started undertaking projects, i.e., we also supply manpower. That's why we have a factory. I agree with Kraos' suggestions; the factory is a different entity. Therefore, I can create a department called Production where all the factory people can come, and the operations department will include site personnel. If it's wrong, please rectify.

Regards,
Revathi Pillai
Manager - HR
RMS India

Dear Raveti,

First, congratulations on joining the construction company. It's very challenging to manage the HR department of any construction company. Regarding your company, here is a list of some departments:

- Pre Sales
- Sales
- Customer Care
- Marketing
- Media
- HR
- Accounting
- Materials
- Project Planning
- Surveyor
- Architect
- Interior Design
- Administration

For different site locations, the code should be grouped by site/department/number of employees.

Thanks,
Amit Jain

Dear Revathy,

You need to confirm a few things before we work on them:

Please let me know if you have the following people in the recent extended service for the supply of manpower:

- Site Engineer
- Site Supervisor
- Quantity Surveyor / Estimator
- Head / Manager - Projects
- Quality Controller
- Materials Incharge
- Manager - Purchase
- Draftsman / AutoCAD / Draughtsman
- Customer Service Executive

Then please list out the positions in the Factory. There is a Factory Manager, so please list the others.

Once you give us the list of existing positions, we can proceed easily!

PS: Make sure you list them separately - i.e., people in the Factory and people in Projects.

Hi Revathi,

Our seniors have aptly mentioned various departments you can include in your organization.

I would like to answer your second question. For the employee ID, you can assign a 6-7 digit code. Usually, systems/software are used.

I would suggest getting an ERP package installed since you are starting with the HR department. This would go beyond Excel sheets.

ERP packages like PeopleSoft have the delivered functionality of generating employee codes automatically, and you can store and perform all related activities for employees through the system.

All the best!

You can also form

Engineering Dept:

1. Planning Dept -
- Manager - Planning
- Sr Engineer - Planning
- Jr Engineer - Planning
- Site Supervisor

2. Contracts Dept

3. QA Dept
- Purchase & Stores Dept
- Purchase
- Stores
- Marketing & Sales Dept
- Marketing
- Sales
- Customer Care
- Accounts
- Administration
- Admin
- Security
- HR

About Employee ID: You can use a 10-digit Employee ID (e.g., 1000000001, 1000000002, etc.).
- Storekeepers can be assigned to the Stores Dept.
- Site Supervisors can be placed in the Engineering Dept.

Hi Ash,

Thanks for your clarification.

Actually, a team consists of Tech Engineers, Draftsmen, and Estimators. Once a project tender is received, it is verified by the Cont. Manager/Tech Director, Chief Accountant/Finance Manager, and AutoCAD Draftsman. Please remember that "Draftsman" is a common trade name, but because drawings are being done from manual to computerized using "AutoCAD," it is defined as an 'AutoCAD' draftsman.

At the H.O. or Planning Department level, there will be Draftsmen to study the project, understand the technical details, and discuss it with all the people at the H.O. level. Even after tendering and obtaining the job, it is constantly reviewed during the progress of the work for estimation of procurements and additional work involved with the same basic infrastructure available in the project, e.g., additional floors, additional pipelines, additional fixtures, etc.

In a given unit, i.e., one project, there will be a Project Manager, Project Engineers, Project Accountant, Design and Quantity Surveyor, Admin Assistant & H.R., Site Engineers, Site Supervisors, Foremen, and other trade workers, as well as drivers for operations such as driving trucks, forklifts, cranes, and other mobile equipment, plus worker-helpers.

Normally, for each project, the entire operations and work allocation are done by the Admin Assistant HR with the instructions of the Project Manager, and he oversees it. He keeps track of attendance for payroll, leave, absenteeism, and arranges replacements if anyone goes on leave. If additional manpower is required, it may be sought either through H.O. from other projects or hired temporarily directly at the site for a short duration.

Likewise, legal aspects of Professional Tax, PF, ESIC, Contract Labour Act, Minimum Wages Act, Workmen's Compensation Act, and taking care of all insurance for works and medical for all staff come under HR.

The subject is vast, and if we start discussing, it goes deep. But once you start fitting each peg, things will fall into place.

Thanks to everyone who has read my detailed comments.

Regards,
Mr. Rama
Chief Accountant
Cont. Co.

Hi, Ms. Revathi,

Referring to your query titled "What departments shall I create?", I want to mention that I am going through the same situation wherein I have accepted the challenge of initiating an HR department. The only difference is the industry, as I am working for a trading company in the Paper Industry.

So, please help me with your experiences and learnings as you must have accomplished some of your goals, and I have started a month back. My questions are exactly the same. I am waiting for your reply.

My email id is [Login to view]. So, if you can email me some material regarding the same, it will be of great help. I also thank Ms. Asha for her inputs and expect the same guidance in my case.

Regards,
Gunjan