HR Setup - what all processes stepwise should be done to start up an HR setup in a start-up firm?

Hi, I want to start up an HR department in a start-up company. Since there the number of employees is very less, I just want to know what all processes stepwise should be done to start up an HR setup in a start-up firm. Waiting for the reply.
Thanks and Regards

Dear,
I would like to share few inputs to setup HR in startup organization. I have 4 years oof exp. in HR which includes 1 year exp in a startup company.
Would appreciate if you can provide your contact no. or email address...or else you can drop me an email me.
I hope, if I can assist you in this.
Regards.

sreowshi_23,
firstly do not go for consultancies. your company is a start up company. it is better you start only few required HR frameworks in it. as and when you guys settle down and expand, you can outcource ur activities. in the beginning, you can go for these :
- leave policy ( including number of leaves allowed and to whom, leave absence notification )
- some trng programs related to their domain
- some team engagement activities
- induction programs
- performance measurement and KRAs
in the beginning, these many shud be sufficient.

HR Department is a very important branch in any organization. It should be designed in such a way to transact the busienss activities in a transparent way, most probably in the start up companies. HR Department should be set up in the first instance in the following ways:

1. In the first instance, please prepare to organize a Management Information System (MIS) with a view to maintain regularity and maintenance of all the employees data base in a systematic way in such a manner to find out the details of the employees at a glance at one given point of place.

2. Create an Establishment section with qualified and experienced staff members to look after the personnel/service matters of the employees in a systematic manner

3. Take action to prepare a Service Manual indicating the different categories of employees working in the firm, with the requisite qualifications, experience taking account the needs of the firm and utilization of the staff members both technical, and non-technical and supporting staff.

4. A systematic Recruitment Policy is to be adopted for selection and recruitment of the qualified staff to meet the requiremets of the man power utility. A transparent Recruitment Policy may be designed and adopted for the administrative convenience of the firm. Prescription of the requisite qualifications for various types of posts is necessary to have a uniform policy in recruitment of the staff both technical and non-technical staff

4. Induction programme is very important for the expertise of the staff both technical and non-technical. Senior Members of the staff may be given the task of the Induction Programme

5. If necessary, Training and Development of the staff may be taken up for the betterment of the company activities

6. Performance Appraisal is the back bone of any company to find out the performance of the employees from time to time and to make the employees to suit to the needs of the firm. A decent Performance Appraisal System is to be designed and adopted.

7. Create a well organized service rules for the employees of the Company duly indicating the procedures of appointment, traning and development, probation, Confirmation, Disciplinary measures etc. for the sake of the Company.

8. Leave rules of the Company have to be framed. This may be adopted on par with other related Companies, or Government departments or according to Labour rules.

9. Statutory Rules relating to PF, Gratuity, ESI, Professional Tax, Income Tax are to be applied as per the relevant rules of the concerned Departments, as these rules are mandatory for any firm.

10. Service welfare is the promotional activity of the employees of any firm. Employees welfare is the important activity for any Management. Rules may be framed for giving certain benefits to the employees viz., Medical attendance, study leaves, Festival advances, etc.

The first thing that you do is define the boundaries of your department. I suggest you start with basic services such as recruitment, benefits administration, labor relations - the transactional administrative hr functions before you explore progressive hr facets. It is also important that you create as early as now a Human Resource Information Systems (HRIS) as this will arm you with critical hr info that you need in delivering most of the hr functions. The important thing is that you are well aware of the expectations of management with the creation of an hr department.

first based on your requirements and strength of the organisation you hire the people for managing the HR needs of the organisation .

second one is you prepare manuals (Eg:induction, Hr manual ) and policies (HR policy , T&D policy) third one is prepare a good HRIS systems for providing accurate data for many of the HR activities and processing .

forth one is for all the routine HR activities like time office, , employee data base management, pre & post joining formalities and Performance appraisal stream line all the HR functions in a row and engage people and suitable systems and techniques.

fifth one is you just plan that any of the HR services and be outsourced or managed by a third party or you need a specialized people to handle that particular area. it can be deceided by your organisational requirements. (For Eg. many of the firms outsource security , canteen facilities, pest control or house keeping staff)

last one is prepare Operating procedures and a periodical check list for your daily or some important activities and prepare a check list for all Statutory requirements (applicable labour legislation's, concerned authorities and persons, returns data management and due dates, compliance procedure and maintaining advisers or service providers).

after making all these in a row or like your convineant sequence you just evaluate the results conduct audits and teem meetings .. you just try to make things in a better and healthy way. all the best for you . remember at initial days you need to work a little hard. mistakes may happen but rectify as soon as possible or else it may cost more. starting a HR department can gives you a sound experience and great knowledge on overall HR practices and needs of a organisation. take the best out of this opportunity. just like win - win strategy you gain good knowledge and experience in returns you provide best services and adopt good suitable HR practices. you can reach me when ever you need my suggestion. God's mercy will be with you :-)

Hi,

This is what a basic HR set up is required to be

Recruitment: Hiring the right people for the right job-Have your EXACT job demands and skill requirements outlined and then analyze the SOURCE through which you can hire from. A start up company might have less salary offering and hence hiring experienced people from reputed firms can always be a challenge. Plus, people from LARGE COMPANIES can do only specialized tasks and may not have in depth knowledge on a wholesome process (as far as my hiring experience for a start up is concerned)

Compensation:May not be the best in business, but you should have a systematic and structured pay pack which can include variable pay and bonus payment at the end of completion of 1 year in the org etc. This would also cement people atleast for 1 year as people might stretch themselves for their bonuses even if the start up company is less challenging or less engaging.You can also pay SHIFT ALLOWANCES and split the salary offering into an attractive proposition for employees to come and ask you for less than inviting od hour jobs.

Training and Development:Set up a training through the Management and ask them to provide a FLOW CHART on the basic processes. Initially, after hiring and induction of new employees, you can ask the new ones to research and do presentations on various areas and technologies involved in the workflow. This would be cost effective and a sefl learning procedure and you can also build a compendium of WORKING KNOWLEDGE. The presentation can also mean something for their CONFIRMATION/PROMOTION. Run the T&D through the employees as it would motivate them to learn more and be updated with the latest in business trends and this would make them more competitive too.

Welfare:As a HR of a growing organization, it is inevitable that you spend time with the employees to know more about their NEEDS and WANTS. List it out and be open for suggestions and feedback with the assurance that implementation of every suggestion may not be possible but the best would be done to take care of the employees. The employees would be loyal to the company if they know that they are cared for and their words are valued. Apart from the basic Accident insurance/ ESI etc, the company go a little more in granting LEAVES as the situation warrants for serious cases with assistance in the form of half pay etc.This is just another example of how the welfare measure could be.

Employee Engagement:Less expensive engagements like ethnic wear, regional festival celebration,team games etc should be a part of MONTHLY/FORTNIGHTLY agenda to keep the employees engaged and for keeping the work ambience vibrant and full of energy.

Separation: As is the process everywhere, have a SEPARATION policy that can accomodate immediate separations (Termination on disciplinary issues) or a normal routine kind of separation arising out of mutual agreement. Always have a back up for any/every kind of work through JOB ROTATION or CROSS TRAINING so that there is not overmuch dependency on any individual at any point of time. Have a FORECAST and keep hiring or ENGAGE PROSPECTIVE HIRES for potential vacancies much before a separation arises

HR POLICIES: Based on the kind of business that you would be engaged in and the kind of work culture in your region, formulate policies that would guard the interests of the business and also help employees fulfil their fullest potential. Formulate in such a manner that it is not intimidating to the employees as PEOPLE CAN'T BE CREATIVE IN A WORK ENVIRONMENT THAT PROMOTES FEAR. Empathise with your employees and also think of yourself as the business owner while formulating the policy and ALWAYS THINK OF HOW A POLICY CAN BACKFIRE IF THE APPROACH IS DEIVATED SLIGHTLY AT SOME POINT OF TIME.This would be the basis on which the above mentioned titles operate. The policies can be tweaked as and when you find areas of improvement with respect to a particular HR Function.

Approach professional organizations to help you out in your set up if only there is a need as a start up company would only require basic set ups initially which can be managed easily. You can still look at PAYROLL agencies if you find working with numbers and legal compliances on WASA (Wage Ans Salary Administration) a challenge

Hope this helps

Hi,
At the scratch level of the organization, HR plays a vital role and should take forward according to the objective of the organization. You may start in that manner also
• First we should constraint on statutory compliance i.e. various licenses, PF, ESI etc.
• Develop organization chart
• Formulate various policies and procedures i.e. Credentialing, Recruitment, Performance appraisal, disciplinary & grievance handling etc.
• Manpower planning & resourcing
• Formulation of Job profiling and KRA of new joining
• Develop MIS for Management which could make transparency with the management.
• Develop New Employees orientation programme
• Develop the training & Development on the job as well as behavioral
Regards
Balkishan Sharma

hi sreowshi,

Well said Jean.... I definitely appreciate the way Jean put across his thoughts. More or less setting up a HRD is like creating a human being (Mithologocally Lord Brahma does that) giving eyes to see, hands to do work, nose to smell... The reason for my comparision is that only if all organs in a Human body is well placed then only a human being can make his life 100% successful. Here organs in HR point of view are policies, flexibilities, and Benefits. As you told that your's is a small organization, i hope you will have utmost freedom to define your own process and policies that can motivate your employees towards the improved productivity. Here Are my few inputs:

Recruitment: I Believe Hire the attitude and train the skill is the best way in Recruitement, Never ever Hire people on recomendation, while initial screening itself you need to recognise the people fitment in the role and check for the flexibility to extend their supporting hours.

Compensation: Do not overpay or Underpay, check the current market brackets with the other organizations at your standards.

Induction: You should prepare a nice PPTs about your org mission, vision, Leave policies, Group medical policies, and all other benefits and facilities. As the org is small and growing we cannot expect that there will be a separate session to give PPT presentation, so as and when new employee joins you after completion of joining formalities (documentation collection, creating a emp code,and company id...) please forward these PPT and ask employee to go through it and revert in case of any questions. This is the best way to handle the induction session when there are only few number of joinings.

Policies: Be prepared with the Leave policy, dress code, Code of conduct, Floor Decipline, holiday list for the year, event calender month on month basis, internet usage policy, information security,Company telephone usage policy, appraisal policy.

Statutory: ESI & PT & PF, i suggest initially you can hire consultants to take care of, there are many people who are working on ESI and PF offices who can work as a consultants. As these compliances are related with the Govt, and any issue comes up they can handle the situation without any further burdon on HRD.

Events/Employee Engagement: Talk to the management on the arrangement for team outings on regular basis (once in a 3 months) this will help the employee to get refreshed and can help the employees to know about each other. These outings should be fun filled with team activities, games...

Team Meetings: These meetings cannot be a formal ones with a conference table and a projector and glasses of water, just walk on to the floor and ask any employee about his/her work place issues,or any other issues where he/she feels HR can help. Take a sample of few such issues and generalise it and talk about how to handle, while talking itself some more employees will come up with some other issues this process will give a scope to employees to express themselves and you address them so that they feel they are secured and have a support. while closing the meeting NEVER FORGET TO LEAVE A OPEN END...

Exit: We have to talk as less as possible on this topic, you can always talk about this on case on case basis individually, talking abut Exit process can motivate other employees which is a very bad impact. For any employee Exit is unavoidable talk to them individually in you cabin and explain him/her the formalities. Any ways the notice period will be mentioned in the appointment letters. so talk less about this topic in open forums.

HR is a vastarea, If i conclude that i have covered entire functionalities of HR iam wrong. so Feel free to reach me on [Login to view] for further discussions. Always follow CITE HR for any clarification.

I wish you all the best in your assignment. If you are from Hyderabad, please let me know so that i can come up with sessions for your employees on HR (For Free of cost).

PS: I am not running any consultancy or work for it, this os my own interest to share the knowledge.

Thanks for all CITE HR members for sharing their knowledge.

Cheers,

Rama Mohan (Raam)..

Hi,
I have done the same work few years back. My suggestion is to go step by step and pick basic processes which are required to carry out day-to-day business under the scope of HR e.g. Leave policy, attendance policy, recruitment procedure, salary practices, Induction policy, office etiquettes, general code of conduct, etc.
Once the the basic structure of HR is constructed then you can move on to the next level for HR initiatives based on the nature of work carried out in your organisation.