How Do I Build an HR Department from Scratch in a Growing Company?

Hi, I have currently joined a company that is over 4 years old with almost 100 employees, but it does not have an HR Department or administrative personnel. The company lacks details of its employees and never conducts any Performance Appraisals. When the management decides to increase an employee's salary, they simply do it without any formal process.

Current Situation Overview

In summary, there is not much in the company related to employees, but it is performing well and is genuine. I have recently been appointed as the only HR personnel. The management wants to revamp the employee details and establish proper standards.

Personal Experience

I have nearly 3 years of experience as an HR executive and have worked in 2 companies, but this is the first time I have encountered a company with no HR function!

Seeking Guidance

I seek guidance on where to start to make this HR function effective. What should be my top priority in this situation? I am looking forward to your help.

Your situation has both pros and cons to it—the con being the dilemma you already have—where to start, since it can be mind-numbing, and the pro being—you have such a good opportunity to make a difference to the entire working environment of a full company, something not many HR professionals have or get even after gathering more experience than you.

Suggestions for Building an HR Function

I suggest beginning to meet each employee one-by-one and collate the typical HR information that you need to build up the employee records/files. That way, it will also help you establish a rapport with the employees—and, more importantly, clarify the queries they are bound to have along the way, rather than make a separate effort to handle this aspect of HR.

This interaction will also enable you to begin making a list of areas that you need to prioritize/focus on as well as provide data/inputs when you reach the stage of formulating the HR policies.

I am sure other members would have more suggestions to help you pull it off with élan 

All the best.

Regards,
TS

First of all, let me request you and other new members to disclose your name so that the members can address you by name. We welcome you to this knowledge-sharing forum in which you can learn a lot and share a lot with our members.

While joining the company, your MD might have told you the purpose of your appointment. What is his priority? Please act accordingly.

Otherwise, please collect and consolidate all the details of the employees, their applications, resumes, copies of educational certificates, experience certificates, address proofs, offers of employment letters, appointment letters, their salary details, other benefits, promotions, performance appraisals—everything. Start filing and maintaining individual staff-wise records. If the appointment letters are not issued, then start preparing them, get the same signed by your MD, and issue them to the employees. Keep the accepted copy in their personal file.

Start Developing HR Policies

Start making the HR policies part by part so that you need not struggle to get them approved. You can start with the leave policy, performance appraisal, promotion, separation, interviewing procedure, joining formalities, transfer, benefits, compensation package details, discipline, punishment, working hours and working days, holidays, etc., one by one and get them approved by your MD so that others will not resist adopting the same.

Wish you all the best.

I have also joined the same kind of organization as you. I was a fresher when I joined here, and fortunately, you have three years of experience. I will try to share my experience with you in this regard, which may help you.

Steps to Establish an HR Function

1. Don't rush into every aspect of HR at once.
2. Start by maintaining employee records.
3. Begin to collect information that is possible to gather.
4. Concentrate on timing, attendance, and other related matters.
5. Discuss with management to obtain an HR manual for the company.
6. Just because there was no HR before does not mean there was no HR work.
7. Attendance management, salary processing, time management, and everything else fall under HR responsibilities.
8. In my company, HR responsibilities are also shared by other departments like Accounts, OM, etc.
9. If you have a good understanding of IR issues, start immediately. For example, ESI registration, yearly and half-yearly returns, submission of holiday lists, leave record form-15, form-11, form-23, form-24 (these are all related to production industries).
10. If you lack knowledge in these areas, consider asking management to hire a consultant.
11. Introduce job descriptions for each position in every department and try to implement competency and skill matrices for training purposes.
12. If possible, go for an ISO certification which will help in executing HR work properly. This will be beneficial for performance reviews, employee records, individual training, and increasing productivity.

Regards,
Shobha.S