Setting Up a Small Business HR Department

Starting a Business Also Means Setting Up a Human Resources Department

At first, many small businesses manage their human resources function with spreadsheets. As the business grows, this system is less than effective because it does not scale well. Setting up a human resources department within a new or established company takes work, but with a solid plan and great legal advice from experienced corporate lawyers, your human resources department can be up and running in no time.

Every new company’s human resources department should include the following:

• Start with job profiles: Each role in your company should include information about the job position such as duties and responsibilities, qualifications, and pay grade.
• Create an organizational chart: The organization chart helps start-ups with workforce planning, succession structure, reporting and salary grading, and identifies gaps that may be filled by outsourcing.
• Establish a system: Creating a staffing plan that scales as your business grows is crucial because it permits your company to break down its key functions and the people needed to perform those functions under the stress of growing and hiring many employees. The staffing plan should include specific goals and key competencies desired when you are recruiting sales, operations, product development, and marketing personnel.
• Create a salary structure, compensation and benefits document: A salary structure document supports the compensation structure of your company and helps keep your labor costs as close to budget as possible. If your company offers other forms of compensation, such as stock options, profit sharing or a work-flex environment; make note of them but keep them separate from the salary structure document.
• Establish job performance standards: Determine job performance standards for each position and develop an employee evaluation process. This will enable a young company to make sure that as it grows, its employees can adapt and change as the business’s requirements expand. Understand the difference between an annual review and constant and measurable feedback.
• Create an employee manual and policies: Once you have established your company’s human resources systems, the final step is to create a written employee manual and company policies, especially as they relate to social media and technology use, workplace violence, and harassment policies.

What if My Company Does Not Have Any of These Human Resources Protocols in Place?

It is not too late to establish human resources systems and create the necessary documents. Seek immediate help from a corporate lawyer who specializes in advising new businesses on how to create, organize, and maintain their human resources department. The above list is not all-inclusive. Depending on your industry, there may be more or fewer requirements.

For example, other documents that your human resources department may need include:

• Established leave policies, including holiday, vacation, sick, and personal days;
• Travel and expense tracking;
• Time and attendance records, including mandatory meal breaks, if applicable;
• Training and development modules;
• Suspension and termination policies;
• Job description templates;
• A new employee orientation program;
• A company mission statement and goals; and
• A uniform or dress code policy.

Do Not Go It Alone

Companies can easily set up or catch up with their human resources documentation through planning and implementing systems and processes for all aspects of the employer-employee relationship. To understand how to prepare your human resources department to scale-up, schedule a consultation with a corporate attorney who advises new businesses on this crucial function.

To speak with one of our business lawyers about setting up a human resources department for your new or established business, request an appointment today or call us at (925) 463-9600. JGPC Business Law serves businesses in Fremont, Hayward, Oakland, Tracy, Manteca, and San Ramon at our Pleasanton and Livermore, California offices.