How to Set Up Your HR Department Structure: A Step-by-Step Guide for Startups

How to Set Up Your HR Department Structure: A Step-by-Step Guide for Startups

Many small businesses fail to set up a human resources department because they do not see the need to invest in an HR department. If you do not want to be part of the 20% of small businesses that fail in their first year then you will find our guide for planning your HR department structure helpful.

Keep reading to learn how to go about setting up this important department.

1. Hiring and Onboarding Procedures

No matter how small your startup is you want to take into consideration how you will hire others. Part of the game plan is where you will post job ads and determine who your target candidates are.

As part of hiring you will want to have your onboarding paperwork in order as well. You can have an offer letter template in place, an I-9 for employment verifications, payroll information such as a W2 or W4, and any agreements you might need the employee to sign such as a non-compete, or intellectual property form.

The goal is to set up employees for success right from the start. You want to establish your expectations on this first day and keep the lines of communication open with all of your new hires.

2. Policies

As part of the HR department, you want to have clear policies in place to help safeguard your company against litigations or unethical practices. These policies should make it clear to your employees what behavior is and is not acceptable.

Various policies you want to make sure are set up include a policy of the basic standards of code of conduct, policies around conflicts and grievances, policies in regards to retirement and termination. Having all of this in place with HR will make it easier for your employees to know what is expected from them.

3. Compensation Structure

Next up on the list is creating a competitive compensation structure to not only attract the best talent around but to also keep the talent from going to work for the competition. You want to establish a fair pay structure according to what is normal in the industry.

Decide whether you will offer optional benefits to employees such as vacation, medical, life insurance, retirement, etc. You can use tools such as Quickbooks enterprise 2019 to help keep everything organized within your HR department.

The key when setting up compensation is to not underpay or overpay any new hires while keeping employees happily working with you.

Now It’s Time to Plan Your HR Department Structure

Like we mentioned earlier no matter how big or small your company is, do not underestimate the importance of setting up your HR department structure. This is not something you want to scramble around and do at the last minute right when you are about to hire your first employee.

Have everything in place and watch everything work out much smoother and in your favor.

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