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How to create an HR department

In many small businesses, the human relations function is handled by someone who has other job responsibilities. However, as your business grows, you should think about setting up an HR department — even if it’s staffed by only one person.

I recently saw a guide from Hireology that provides a good roadmap for setting up an HR department. The first step is to establish HR policies. Having policies in place and following them in each and every case reduces your risks and makes for a consistent employee experience.

According to Hireology, here are the steps to take when establishing your in-house HR department:

  • Develop a plan for the department’s structure and operation. This plan will be valuable for maintaining consistency in your employee practices as your company grows.
  • Establish employee recruiting and onboarding procedures. This should include having all the necessary paperwork prepared, including a sample offer letter, employee information for payroll, I-9 employment verification forms, etc.
  • Outline compliance, safety and health regulations so they comply with the rules established by the Occupational Safety and Health Administration (OSHA).
  • Define compensation and benefits packages. You will want to make sure you are offering wages/benefits that are competitive with other businesses in your market area and also have a clear career path laid out for your employees.
  • Develop training programs. Initial and ongoing training are very important to employee development and to the long-term success of your business.
  • Develop procedures for managing employee performance. In addition to informal feedback, you need a systematic way to provide feedback to employees on an ongoing basis. You also will need disciplinary actions should employees fail to follow established company procedures.

As you are developing your HR department, remember that it reinforces your corporate culture, so make sure the policies and procedures you put in place mesh with your overall culture. This is a good time to revisit your core values and then make sure your operational practices are aligned with those values.

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