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How to Start and Grow Your HR Department: Complete Guide


Human resources department is an important part of any organization. HR department has various important roles which work for the benefit and growth of any organization. Therefore, it requires people with immense efficiency who have an understanding of what a company requires and how it functions. Their job role is more than hiring the candidates for the company, they need to train them, impart the essential knowledge, rules, and regulations of an organization.So the importance of Hr department is always high.

HR department is the one which takes care of the concerns and problems that an employee might be facing while working. They work for their salaries and various other issues or listening to their problems, handling their compliances.

Therefore, it is important that an HR department needs to grow and develop for an organization to reach greater heights with the right kind of people in the team to define company’s vision and make it come true.

To understand how an HR department need to start and grow, below are points to be considered.

Start and Grow HR Department

Setting Up an HR Department Checklist:

1. The budget for HR department:

Before setting up an HR department an organization needs to decide the budget they are ready to spend on HR department. It is inclusive of the salaries they are keen to pay to the employees, the additional expenditures regarding the signing of the offer letters or providing benefits to the employees. All this needs to be managed, planned and then only put to action.

A proper Company Budgeting will also give the clear idea about the estimated amount that the employer was seeking to spend and how much the actual value can be spent, keeping this information in mind the changes can be made to achieve the best plan for action.

2. Plan for staffing:

For an organization, it is important to pay attention to the key people they require in their firm. From senior management to the entry level candidates. A plan is required as per the job, which will be helpful while deciding for hiring.

It is good to talk to the people in the team from sales to operation and marketing or any other which is required, understand their skill sets, their work, what all they will be doing for coming year and what is the target required to achieve. This information gives an insight for the requirement of hiring.

Also, ensure to include in the plan about the employees who will leave in future and how the replacement will be made for the same.

3. Creating salary structure:

Salary is an essential part for an employee to work and stay for longer period of time for any organization. Therefore, ensure that your company is providing competitive salaries to their employees.

A thorough competitive research is required, understanding the salary paid by other companies for the same work profile is important. It helps the employer to pay competitive salaries to their employees to stay ahead in the market.

Ensure to keep your salary structure to be updated in every six months. If the employer is providing any employee benefits and compensations then they should be maintained separately than the core salary structure.

4. Organizing the training for the staff:

Every company has a different structure and way of working, therefore, it becomes important for the employee to familiarize with the company. Creating a training program for the new employees helps them to start working efficiently.

If your company is small and does not have the facility to plan huge budgets for training or call for external mentors, yet there are ways to manage the same. You can ask your manager to train them as they have the good idea what the new joinees need to work on, or arrange for a webinar.

You can also ask your business partners to pitch in once in a while and share their experiences with the employees from time to time, this additional knowledge will encourage the employees to work efficiently.

5. Performance measurement plan:

Usually it is the team head who looks into the performance of the employee. But to have an effective plan to generate key performance indicator or KPIs will help to set the benchmark to know where the employee stands in the work.

The HR department should take the charge of deciding the performance benchmark of the employee because then they can track how the team is performing as a whole. If they tend to see a problem somewhere then they can talk to the concerned employees and understand their issues. Which later can be handled by them effectively.

Ideal HR Department Structure:Importance of HR Department

1. Tracking traveling expenses:

There can be instances when an employee, from any department, may travel within the city or some other city regarding work.

The HR department needs to keep a track of these travels of the employees and ensure that their expenses are paid beforehand without any hassle, as this helps the employee not to fret for the payment and focus on the work.

Even in the cases where the employee has to pay from their pocket, the reimbursement needs to be done on time. An effective HR team keeps the employees happy and they then focus for the organization to grow.

2. Providing the leaves and compensation:

The HR department needs to know what are the standard holidays observed by the company and others which an employee deserves.

Every company provides leaves and vacation benefits to their employees in various ways, for example, sick leave or paid vacation. This comes handy if an employee falls sick or takes a break from the day to day work to rejuvenate.

Providing leaves and comp offs are a way to encourage employees to be rest assured that the employer takes to care for them. HR department needs to be clear about the various leave policies from sick leaves to comp offs or be it national holidays.

3. Organizing events in the organization:

Another encouraging factor in a company is if they organize some events or activities which refresh the employees. For example, annual function not only makes the achievements of a company but this is also a time when employees can showcase their talents and be recognized within their company other than just work. HR department needs to incorporate such other events because this makes work fun.

For example, some other activities can be pot-luck or special events for women’s day or fathers’ day. This is another way of acknowledging the importance and effort put up by the employees for an organization.

4. Resolving issues of the employees:

Every organization tends to have some or the other issues where an employee face some trouble. It could be the difference between a manager and the subordinate, or some professional issue or sometimes employees can have personal issues that can affect their work.

HR department is an essential part of any organization because they are the one who understand the employee’s concerns better than anyone else. Therefore, HR team needs to have people who are proficient with people problems. Because to keep the company running and moving towards profitability every person’s issues are required to be solved timely.

5. Health management:

In an organization, health management for the employees goes more than just providing the health benefits to the employees. With so many number of people in a firm, the possibility of the occurrence of health emergency happening is high. HR department ensures that the first aid kit is in place and is complete.

The essential health tips like CPR is imparted to the employees well enough if an emergency arises, they are the one who ensures the person reaches to the hospital on time and the treatment happens on time. This timely act not only saves the life but also keeps the employees safe, hence, this is an important task HR department takes upon which ensures safety for all the employees.

HR Documents and Forms to Start your HR Department:

1. Creating job profiles:

Deciding on to the job role that each employee will be undertaking, is an important step while working on the documentation process. Mention the details of the job role and the best-suited person that will fit for the job.

In future, this also helps while reviewing the performance of the employee, if they are doing just with the work and further planning their key performance indicator.

2. Planning company’s hierarchal structure:

Further step is to create a plan of hierarchy, which will clarify not only the job description but also who will be reporting to whom. Many smaller companies might have problems in this segment due to the limited number of people in their setup, where one person might be doing multiple jobs.

But in larger organizations, each and every person is specified with the job role and is assigned a manager to report to. Along with this, it also helps to understand if the job role is full-time, part-time basis or can be outsourced. This is helpful while grading for the salary.

3. Writing down the job description:

For a work to function effectively an employee needs the clarity for the role they will be playing in the organization. It is important for HR department to mention the clear job roles the employee will be assigned to, which in turn becomes the basis for the performance analysis for the employee.

Clarity in job role also establishes certain structure, which makes it easier for everyone to perform evenly. Job description information also becomes more important when an employee is promoted or their department is changed because their job role also changes or some additional responsibility might be added.

4. Creating the system:

Majority of the startups follow the MS Excel system to organize all the information about the employee or the candidate planning to be hired. This is important yet a tedious task to be followed since keeping the track of every employee is not easy, along with their details and various other information.

On the other hand, a system creation is essential for tracking, with the availability of technology, various applicant tracking system or ATS have been developed. There are various ATS available as per the company’s needs. HR department can easily learn them and use it to the benefit of the organization.

5. Exit interviews and forms:

There could be many instances where an employee leaves a job or is fired for some reason. Therefore, it is essential to decide if an exit interview is to be conducted. Letting go the employee on good terms is an important step to follow for an organization, so as to create the goodwill among the employees.

How the process of exit is to be planned is decided by the HR team, the length of notice period from two weeks to two months, depending on the company is looked by HR team. Is there a need for verbal or written warnings or on the conduct of the employee that is to be noted, is all taken care by HR team.


Many organizations do not consider HR department as an important one, but before beginning to structure the departments in the firm, one should begin with creating the right HR team. Because a good HR team not only structures but manages the people quite well.

There have been many discussions regarding the number of people hired in HR team as compared to hiring for another department, many firms tend to cut down the required number of people needed for HR team to fulfill the hiring requirements for other departments while maintaining the hiring budget.

The point to be noted is, HR team needs to be strong and best people needs to be hired for an organization to work effectively as a whole. More than focusing on the number of people to be hired, look for the efficient candidates that need to be part of HR team. Every company needs to understand their requirements and accordingly need to decide on the strength of HR team.