How Do I Implement an HR System from Scratch in a Multi-Branch Company? Seeking Guidance!

I have a few years of experience in the HR field. In all my previous companies, there was an HR system available, and I was following and practicing the existing policies. I recently joined a company in Kerala where the management wants me to implement a complete HR system. I have developed an HR Manual, and it is under discussion with the management.

I know there is a lot to do to build an HR system in a company. Can anybody help me in this regard? What are the step-by-step procedures I should follow to implement a complete HR system in the company?

The company has three different but small sectors of business. They also have branches, but these branches operate under different names and licenses. Some branches have more than 20 employees, and some have fewer than 20.

Assistance Needed for HR System Implementation

In this regard, I would like somebody to help with the following:

- How to obtain a labor license? What are the procedures? Does each branch need a different labor license?
- Is PF compulsory since the branches are under different names and licenses, and some have fewer than 20 employees? If compulsory, what will be the procedures?
- What about ESI?
- What about the labor welfare fund and professional tax?
- Is WPS necessarily implemented?

Please, is there anybody who can help me?

Step-by-Step Procedure to Build an HR System for a Company

1. List the various human resource needs you have.
2. Decide on the organizational structure you will use.
3. Create a system for recruiting, training, managing, and terminating employees.
4. Develop a compensation program that includes levels for hourly wages and salaried positions.
5. Meet with your accountant to determine if you will handle payroll in-house or outsource it.
6. Review the costs and benefits of adding wellness programs, such as an employee fitness center, seminars delivered by health experts, a wellness newsletter, or paying for smoking-cessation programs.
7. Meet with an employment attorney to review your HR system.
8. Create a budget for your HR system based on your wish list.

Steps to Set Up an HR Department

Thank you for your query regarding systems, policies, and procedures to set up an HR department.

Regarding the steps to set up an HR department, there is no one-size-fits-all solution. One needs to study and audit existing systems, procedures, rules, and policies to handle HR tasks, much like how different doctors specialize in different ailments. Kindly go through the following points, which I hope will be useful for your work.

Initial Audit and Assessment

In my previous manufacturing companies, I had the opportunity to set up HR systems from the start. First, I audited existing systems, rules, and documents maintained in the company, such as attendance registers, leave records, statutory returns, licenses, and personal files.

Comparison and Recommendations

I compared these with the list of documents to be maintained as per the Factories Act and other relevant acts. Then, I recommended steps to address gaps and inadequacies for adoption and implementation.

Important Formats and Documents for HR and Administration

As I was responsible for both HR and administrative tasks, I designed and introduced basic formats for various jobs, such as cash advances, travel expenses, and leave records. I also collected and maintained all statutory registers and implemented various employee benefits schemes.

Appointment and Personal Files

I created a new company application form to collect employee details and issued induction kits with appointment orders, standing orders, and other necessary documents. Personal files were opened for each employee with all relevant documents.

Fresh Recruitment

For fresh recruitment, new forms and checklists were introduced to streamline the process, including manpower requisition forms and interview assessment forms.

Reports of Manpower - MIS, HRIS

Master lists, manpower planning, and HRIS were introduced for categorizing employees, job descriptions, and safety checks as per ISO requirements.

Absent Notification Form

To monitor and control absenteeism, an absent notification form was introduced, along with proper disciplinary procedures.

Constituting Various Committees

Committees for safety, canteen, housekeeping, and grievance redressal were constituted to ensure smooth functioning and harmonious relations.

Training and Development

Training programs were conducted on various topics, including discipline, attitude, and health tips.

Leave Card/Record Form

Some companies still use loose leave application forms, which can be problematic. Introducing a leave card record is more efficient and statutory.

Holiday List - 2017 Optional Holidays

For continuous working companies, optional holidays can be given to ensure minimum manpower for essential services.

Personal Information Changes Notice

A form was introduced to update personal information changes, ensuring current details are available when needed.

Manpower Indent/Requisition Form

Recruitment starts with a manpower indent form, which helps streamline the recruitment process.

Absent Notification Form - A.N.F.

Absenteeism can be controlled using the absent notification form, with proper disciplinary procedures in place.

Standing Orders - I.D. Act

Certified standing orders empower the company to take disciplinary action against employees for violations. It is crucial to include important acts and conduct in the misconduct list to make the company's actions legal.

I hope you find the above information useful. I will share more upon hearing from you.

Regards, C.Neyim Khan

HR Consultant & Advocate, Ex-AGM (HR&A), Hospet/Bangalore, Karnataka, S. India. Mobile No. [Phone Number Removed For Privacy Reasons] Email: [Email Removed For Privacy Reasons] Qualification: BA, LLB, PGDPM, MBA-HR (Xaviers), Ex-Member, NIPM, Calcutta, Ex-Trainee-Member, Indian Institute of Management, Bangalore. Languages Known: Kannada, Tamil, Telugu, Malayalam, English & Hindi