Whether it’s setting up a Human Resources department in a start-up or starting an HR department for an existing business that had none, the goal is to ensure that necessary processes and procedures are put in place for an efficient and effective Human Resources function.
The intricacies involved may vary if the company itself is a start-up as opposed to if the company existed long before the decision to set up the HR function. In the case of a start-up, the HR personnel would need lots of engagement with the business owner in order to understand the vision and strategic direction for the business both in the short and long term. An in-depth understanding of the sector/industry in which the company operates, thorough knowledge of the regulatory landscape (if any) is of utmost importance as this impacts the various policies that would be instituted in the company.
For an already existing business that has newly set up its HR function, the HR personnel would require lots of engagement with Management and current staff members, knowledge of the industry/sector, knowledge of existing processes and policies (written and unwritten) within the business as it relates to the organisation’s human capital, an understanding of the preferred and the prevalent culture.
The Human Resources department may start as a one-man unit and a lot of things would have to be done. The HR personnel must wear different hats and play both the strategic and operational HR roles.
Some of the critical things to be considered by the HR personnel include but not limited to the following:
- Workforce planning and organizational design: This involves getting the right people for the right job at the right time for the business. It would require the HR personnel engaging with Senior Management in order to determine the job families in the business, the job function, no of staff required to fill each role with consideration for technological infrastructures that may exist. Through the workforce planning process reporting lines would be determined, the organizational structure will be designed. The workforce planning process will ensure the organization is prepared with the appropriate Human Capital to meet both current and future needs. Upon completion of the workforce planning process, HR will have to do a thorough job analysis to inform the designing of job description and person specification for each job role then go ahead to fill the vacant positions needed in the short term.
- Compensation and Benefit: of importance, is designing the organisations compensation and benefit. This would involve benchmarking within the industry and amongst competitor, conducting job evaluations, determining the organisation’s pay policy, pay grade and salary structure, incentives and bonuses. Compliance with statutory obligations such as PAYE, Pension, Group Life Insurance, ITF, NSITF, NHF etc is important as soon as the number of staff in the company meets the requirements for compliance in each of the Act governing the statutory regulation.
- Shaping the organizational Culture: Culture exists, whether intentionally created or not. It guides the way the employees think, feel, and act — often done unconsciously. Therefore, it is critical that HR working with Senior Management defines the values that underpins the organizational culture and be intentional about shaping the behaviors of employees to ensure they fit seamlessly into the big picture. In addition, close attention should be paid to the founding member(s)’ behaviors. The culture is often the shadow of the founder’s personality. This is especially important in a start-up organization. For an existing business, HR will require a culture audit in order to understand the prevalent culture. This exercise will guide HR in determining next steps. There might be need for a culture revamp if it is discovered that there is a misalignment between the preferred culture and the prevalent culture.
- Creating the company’s HR policies, HR manuals and Standard Operating Procedures: If it is a start-up, developing policies will most likely be dependent on best practices, the tone at the top as well as the company’s strategic direction. However, for an already existing business, the HR personnel would first need to assess the current state of existing HR-related activities. The HR personnel may need to document policies AS-IS and tweak where necessary. Having an employee handbook would be critical in both cases as this serves as a guide to all employees as regards basic expectation as regards conduct as well as provide information as regards benefits such as leave, bonuses and other incentives as may exist within the business. Other policies to be put in place includes;
- Dress Code & Appearance Policy
- Confidentiality Clause
- Leave & Absence Policy
- Disability Policy
- Disciplinary/Code of Conduct Policy
- Health, Safety & Fire Arms Policy
- Smoking Policy
- Sexual Harassment Policy
- Policy on gifts and donations from clients and/or service providers
- Conflict of interest policy
- Whistle Blowing Policy
- Separation Policy
- Staff filling and documentation: The importance of documentation in HR cannot be overemphasized. Whether the information will be kept electronically using a Human Resources Information System (HRIS) or hard copy files will be created for each employee, it is important that employees’ files contain important information such as;
- Bio Data Form
- Reference Check
- Copy of letter of employment
- Pre-Employment Medical Report
- Employees Passport Photograph
- Confidentiality Agreement form
- Non-Disclosure Forms
- Interview Assessment Forms
Performance Management: The measurement of both individual employee’s performance as well as overall performance of the business will help to determine whether individual and company goals are met. There will be a need to institute a performance management system where employee’s goals are clearly stated and these goals must align with the overall business goals. Regular check-ins must be done to ensure each employee is achieving their goals and getting feedback on arears of improvement. HR will be required to set the performance cycle, performance policy, train line managers on the performance management process, performance reward, performance measurement framework etc.
While the above is not exhaustive, it is a good place to start for a new HR department in any business, sector or industry. Specific requirement depending on the regulatory landscape might be required as well.
Depending on the growth/expansion plans of the business, the staffing of the HR department could gradually change from a one-man HR team and the structure would be determined based on the need of the business. This could be function specific (i.e. recruitment specialist, learning and development, reward specialist etc) of generalist functions where you have hierarchy i.e. a Human Resources Manager and a Human Resources Officer.