Every HR department has a beginning, a point at which it is born and slowly begins to form. Most startups don’t hit the ground running with a HR professional, and those that do are unlikely to have anything in place beyond a single person in charge of HR. Businesses are built over time, and HR teams are no different.
They all start somewhere. Yet the prospect of building a HR team from scratch can be a daunting one, and it comes with a different set of challenges to taking on a role in an existing HR team, or even being given the task of overhauling and expanding a team that’s already up and running.
When you have nothing to work with it can feel a little overwhelming, but it’s also a golden opportunity to build an incredibly strong foundation that – in time – will allow the development of a truly powerful HR department. It’s a chance to shape and mould the culture of your company, and steer your team (and the staff of your company as a whole) towards a clear and vibrant vision.
At their heart, businesses are all about people. The people running them, the people working in them, and the people served by them.
Why has your organisation decided they need a new HR department?
Getting completely clear on the full extent of the needs behind the formation of your new team will dictate a lot when it comes to putting it together, so take the time to get it all down with as much clarity and detail as possible.
Rope in your boss, your manager, the directors, or all of the above to help you with this. Even if you’re not new to the business, and even if the business itself is brand new, this is really important. Different members of the business may have different ideas about what your new team should be doing, and why they’re needed.
If one doesn’t already exist, create a written description of your own job and the specifications that come with it, as well as broader outlines of the role of your new HR team. If this is not something you’re used to, it’s worth doing a bit of research or getting in touch with a recruitment agency to give you a helping hand.
Think of yourself as the guinea pig for your company’s on-boarding process (even if you’ve been working there for a while and you’re shifting roles). Without a HR department, the odds are new hires have been handled by individual managers, the accounting department, or whoever handles payroll.
Going through the current existing process yourself will help you understand what’s needed.
You’re very soon going to have employees coming to you with questions about how things work, how they’re paid, and other vital functions of the business. So you’re also going to want to take a crash course in all the systems and processes in place in your organisation.
You will need at least a basic understanding of what happens in each department, how they all fit together, and the various roles and positions that exist within the company.
How and when employees are paid?
What benefits and compensation are available for employees at all levels (this includes yourself!)?
What’s the hierarchy at work in the organisation – who reports to whom, what are the various divisions/teams, and who manages each?
Who are the current employees, are any new hires planned for the immediate future, and what are the long-term goals for hiring new staff?
Set up meeting with every executive member of staff within your organisation and take some time discussing their priorities. It’s easy to get tunnel vision and focus only on your own ideas here, and what your immediate manager has told you are the priorities. You should already have a broad view of what everyone expects from the new HR team, but this is specific to their departments, not yours.
What will they need to reach them?
Do they have all the staff they need to get it done, or will they need to hire new people?
Are they satisfied with the performance of existing staff members and, if not, why not?
What will help them improve the performance of their staff and department?
Nobody’s expecting you to fulfil all these needs and fix any problems right away, but you need to know where the goal posts are.
Once you know what the execs in each department think, have a chat with a few of the non-executive employees to get a good cross-section of each department.
Perspectives can be vastly different depending on the individual and the level they occupy within the organisation, so you can learn an awful lot very quickly by doing this.
In the meantime, people will start to come to you. They will be curious (especially if you’re a brand new hire), and will want to understand what you’re doing. They will likely also have questions, and want to take advantage of the fact there is suddenly someone available to listen to their HR concerns.
Simply listening and providing a willing ear for people to confide in will also provide you with a lot of great information – stories, problems, secrets. You need to fully understand situations before you wade in, so initially, try to be a sponge: absorb everything before attempting to take action.
One of the core roles of your new HR team will be managing the structure of the workplace and the various processes at work within it, in addition to staff members. Before you can effectively do so you need to be completely clear on the mission and values of your company.
Then, ensuring your new HR team have specific areas to focus on, rather than everyone attempting to manage every element as one, will help. Try splitting responsibility so you have individuals focusing on administration, compliance, retention, recruiting, training, culture-building etc. These different areas require different skills, and different members of your team will be better suited to each.
Create a framework based on the values and mission of your company, that allows your team to work on the individual areas to which they are best suited, while remaining united by a shared vision for the business.
Once you’re totally clear on the needs and objectives of the business and various departments and elements within it, as well as what your team will focus on as individuals, and a group, create a detailed HR plan.
Share that plan with your boss, and the heads of various departments and other execs, and get their input and feedback. Once you have a strategy that everyone at a leadership level is happy with, which effectively hits all the business’ goals and targets, while remaining true to the company ethos and values, share it with everyone else.
Set yourself realistic goals for the initial 3-4 months, and make sure everyone is clear on what is and isn’t feasible to achieve in that time. There’s going to be a lot you want to achieve, and with the best will in the world, you can’t do it all at once.
Focus on the really big things, get those in place and working well before moving onto everything else.
Starting a HR team from scratch is tough going, so be kind to yourself, and don’t add a load of extra unnecessary stress by expecting (or promising) miracles – you’re only setting yourself up for failure. If you’re realistic about what you can achieve right away, and have a clear vision for your new team, you will be successful.
Any business has a culture existing within it, whether or not we’re aware of it or appreciate it. Potentially, your company culture can be a powerful asset, both to the business as a whole and your new HR team, so why not have a say in exactly what it looks like?
Make company culture part of your overall HR plan, and be proactive about shaping it so that it becomes the best possible asset it can be. If you’re unsure where to start, take a close look at the founder(s) of the company, because the culture will naturally spring up around them: their goals, their ideals, their personality, their hopes and dreams for the business.
Your new HR team will need to be aware of the company culture and seamlessly blend into it, while simultaneously retaining enough distance to see it clearly and manage it. You have a real opportunity to shape the company culture but your efforts to do so will need to be intentional, with clear aims in mind, and consistent, on both a practical level and the language you use in discussion about it and the brand voice of the business.
When it comes to developing your team itself, start at the top and work down.
Get your HR leadership in place, followed by a strong strategy for attracting real talent. Your new team will form the heart of your company’s culture so the people you select are incredibly important. Build a strong network that includes existing hires and people across the industry. When selecting your HR leaders, choose people who share the company’s ethos, are fully aligned with your mission, and ready to be instrumental in taking your business to the next level.
Once you’ve got them, don’t simply leave them hanging. Be prepared to invest in their development through ongoing executive support, coaching, and both personal and professional development.
From there, decide exactly what roles you need on your HR team and start filling them. This is one reason identifying the separate areas you want individual team members to focus on, right at the start, is a huge help as you can then look to specifically hire new team members who excel at each.
An appropriate number of years of HR experience for the position in question, as well as experience of the level of responsibility you’re intending to give them.
Experience of working with a startup, or new team/organisation that is at the level your own team/business currently occupy, as well as experience working at the level you’re trying to reach.
The requisite level of education for the position in question, as well as clear evidence of a strong focus on developing their skills and career in a path that’s aligned with your goals for their role and the team as a whole.
Current and extensive knowledge of any expert areas they will need to handle, such as compliance or employment law.
The capacity to research new areas, access vital resources, effectively prioritise tasks, manage their own projects and workload, and juggle multiple projects.
The ability to work well individually and as part of a team, and easily adjust to the constantly changing needs of a startup and/or a young HR department.
Confidence communicating with team members at every level, including upper management.
With so much to consider, the hiring process can quickly become overwhelming. Consider speaking to a couple of recruitment agencies to understand their process as you’ll often find they are a worthwhile resource. Remember, hiring the wrong person can be costly and have a serious impact on your team.
There’s a lot to be said for having a complete HR department that’s in-house. That being said, there’s a lot to consider and you may find (either initially or in the long-run) that it’s more cost-effective to outsource certain elements to effective freelancers, or use software and various other services to augment your full-time, in-house HR team.
Balance the overall costs of your staffing policies (both within your new team and across the business as a whole) and decide how to get the best return on the investments you’re making. You may not want to cover a full-time salary, for a role that could be filled by a part-time employee or a freelancer on a retainer for a set number of hours/tasks per month. Interim candidates come with a wealth of knowledge and experience, but they are generally much harder to find.
Reducing costs in these areas can give you the budget needed for hiring more experienced full-time staff, or investing in software and systems that streamline your processes and boosts efficiency.
The projected number of employees for the year.
The projected costs of benefits.
Your projected staff turnover rate.
Existing costs incurred in your current year.
Any new programs or benefits you’re planning.
New and recurring training expense.
Any regulations, laws, policies, and strategies that could potentially affect the costs involved in the business.
Your accounting department will have most of this data but if not, you should be able to collect it from relevant department heads and managers.
Startups and new HR teams thrive when focus is placed on developing simple methods and systems that are both effective, and efficient. It’s easy to get swept up in the plethora of processes, programs, software, tools, and apps that are available.
They all promise you a perfectly functioning department, a massively more effective method, and it’s very easy to overdesign everything, so that things that could genuinely help you individually are competing with each other and actually causing you problems.
It’s very easy to focus on the processes that manage people, like PTO and payroll, and that’s understandable – having good systems in place for people management is what HR is all about. But the key here is to spend less time concentrating on all these things that can (at least to some extent) be automated, take advantage of a few good systems, and free up more of your time to focus on developing the actual people in your organisation, rather than devising needlessly complicated processes to serve or manage them.