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All you have to know while starting an HR department

The process that the organization follows when establishing a human resource department varies depending on whether the company is relatively new or just making some additions to the team despite being in existence for some time.

In addition, the problems and questions surrounding the start-up of the HR department are influenced by the existing size and anticipated development of the organization, the amount of funding and infrastructure currently in place, the market, and the corporate vision and culture.

The staffing of the HR department

Hiring a trained and skilled HR specialist is not an easy task for start-ups. Sometimes, employers take the help of an independent recruiter, an HR manager, or an external consulting agency to assist them in hiring suitable HR employees.

Most of the time, in the case of a one-person HR agency, or a sole practitioner, the role will be filled by an HR manager or HR specialist.

Organizations should include the following characteristics when evaluating candidates:

  • The kind of certifications that have earned that are relevant to the subject of HR
  • Experience in collaborating with start-ups or companies of a similar scale or sector.
  • The number of years they have worked in the role of an HR employee and what responsibilities they took on
  • Awareness of job regulations and other topics relevant to enforcement. A contract management strategy must be conducted in order to prevent the development of fragmented processes, reactive decision-making, and business-critical tasks from being missed.
  • Ability to perform analysis, access funding, prioritize and manage various projects, respond to constantly evolving start-up demands, and interact closely with senior management.


Every company needs to file their taxes within the given time like an individual is supposed to.

In order to do that, the company needs to be registered under the government, and it becomes a responsibility of an HR professional. An HR would need to verify that the company has valid identification and that it is approved by local and state revenue authorities for tax purposes.

Based on the scale and composition of the organization, these tasks can be done by the finance or accounting divisions.

The budget of the HR department

It is the responsibility of the human resource expert to coordinate the budget of the HR department with the corporate priorities of the company by adopting operational standards and procedures.

Budgeting requires the organized gathering of information and statistics so that the fiscal capital required to meet the goals of the organization can be estimated. New organizations do not have a previous budget for comparative analysis; thus, assumptions and projections are needed for the initial HR budget.

From an HR point of view, the details used to build a new budget encompass the following:

  • The number of workers expected for the year.
  • A projected benefit cost rate.
  • The expected rate of turnover.
  • Costs accrued during the present year.
  • New incentives or services are planned.
  • Expected legal fees.
  • Recurrent or additional training requirements.

Establishing a payroll system

The establishment of a payroll system must be considered as a high priority while setting up an HR department.

HR professionals may wish to collaborate with a payroll provider to help minimize administrative burdens and help payroll enforcement. Outsourcing of external payroll managers and associated tax responsibilities lets busy employees meet filing targets and deposit specifications.

Once a payroll system has been developed, the payroll must be updated daily like an attendance tracking software. At this point, the company needs to decide if the payroll administration would come under the domain of finance or human resources.

While evaluating probable salaries, the payroll administrator must consider the hour regulations, take into account the minimum wage, pay for overtime and its availability, record management, meal and rest breaks, and how to assess worked hours.

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