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How To Setup an HR Department: A Step by Step Guide


Published on | Creating an HR department is a crucial step for every expanding small business. When the HR department is created, it should develop a plan for overseeing every step of employee management, from an applicant tracking system through the exit process.

Published in: Business

How To Setup an HR Department: A Step by Step Guide

  1. 1. How to Set Up an HR Department: A Step-by-Step Guide for Small Business Owners
  2. 2. A Growing Company Your small business isn't as small as it used to be. The amount of work coming in has required you to hire additional employees. That means it's time to start categorizing work and workers into separate departments.
  3. 3. Human Resources When a business reaches the stage where it starts hiring additional staff, the first and most important initial department the company needs to create is HR, or Human Resources. Human Resources is responsible for managing employees’ personal data and needs, and is the foundation on which an expanding company is built. How does one go about creating an HR department? We’ll show you how.
  4. 4. Step 1: Staffing Plan Because the HR department will be responsible for tracking and managing employees, the first thing they should do is draw up a staffing plan for the company. What positions need to be filled? How much salary are those positions worth? How many employees can the company afford to hire? In order for your business to grow and expand, the HR department needs to answer all these questions.
  5. 5. Step 2: Job Profiles Before interviewing applicants, the HR department should create profiles for every position in the company. These profiles should include responsibilities, company hierarchy, and the best personality types for each job. By creating these guidelines for what each position is and who will be best to fill it, the company will have a clear vision to guide it.
  6. 6. Step 3: Applicant Tracking System Once you start interviewing applicants, you need a way to keep track of all of them. While your small business may have been able to rely on simple Excel spreadsheets and homemade documents before, your new HR department is going to need more specialized software moving forward. Effectively managing the interviewing and hiring processes requires purchasing applicant tracking software that will allow HR to effectively categorize, track, and compare the flow of applicants.
  7. 7. Step 4: Recruiting System There are many different ways to recruit employees in the digital age, including many different job boards and online publications. The HR department needs to decide what recruitment tools it is going to use and build a strategy around them. What kind of listings should be created? What's the recruitment budget? Where should the job listings be targeted?
  8. 8. Step 5: Employee Management Once HR has created and implemented a recruitment strategy, the real work begins. Human Resources will need to create a series of documents for tracking and managing the company's new employees, including: • Timecards/time tracking system • Time off/vacation requests • Performance reviews • Employee requests/communication forms
  9. 9. Step 6: Employee Replacement Eventually, one of your newly hired employees will either leave the company or have to be replaced. It is HR's job to be prepared for that eventuality, and to have a system in place for managing the transition. Will your company have exit interviews? How much notice is required? Will positions be automatically filled, or will they be evaluated and reshaped before a new person is brought in? By having answers to these questions, HR will have a clear strategy for how to manage and evaluate employees from initial interview until their last day on the job.
  10. 10. About The applicant tracking system by is used by thousands of companies internationally to sort resumes, record information, schedule interviews, and manage the recruitment process quickly and efficiently.