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How to Build an HR Department from Scratch



Building an HR department from scratch can be a daunting task. There are many moving parts to consider, and it is important to get everything "just right" so that your new department can function smoothly and efficiently. But don't worry! We're here to help. Let’s break down the main steps you should take in order to start building an HR department from the ground up.


1. Define the Scope of Your Department

The first step in creating any new department is defining the scope of that department. What will your HR department be responsible for? Here are some common functions of HR departments:

  • Recruiting and hiring employees

  • Onboarding new employees

  • Managing employee benefits

  • Administering payroll

  • Conducting performance reviews

  • Investigating and resolving workplace issues

Once you have a clear idea of what functions your HR department will perform, you can begin to put together a plan for how those functions will be carried out.

Keep Learning: Must-have practices & HR policies for startups

2. Develop Standard Operating Procedures

Now that you know what functions your HR department will perform, it's time to develop standard operating procedures (SOPs) for each of those functions. SOPs are essential for ensuring that your department runs smoothly and efficiently. Without SOPs, your team will likely spend more time reinventing the wheel instead of actually getting work done. Every business is different, so it's important to tailor your SOPs to fit the specific needs of your company.

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3. Create a Budget

Creating a budget is another critical step in setting up your new HR department. You'll need to determine how much money you'll need to cover things like salaries, office space, benefits, etc. Once you have a good idea of the costs associated with running your department, you can begin to look for ways to save money where possible.

Keep Learning: What are common onboarding costs for new employees?

4. Hire Qualified Employees

Hiring qualified employees is perhaps the most important step in setting up your new HR department. After all, they will be responsible for carrying out the day-to-day operations of the department and ensuring that everything runs smoothly. When hiring employees for your HR team, look for individuals who have experience in human resources and who possess strong organizational, communication, and problem-solving skills.

Keep Learning: How to forecast hiring needs

5. Get Organized

The final step in setting up your new HR department is getting organized—literally! You'll need to create a system for storing important documents, tracking employee information, and managing workflow within the department. There are many different ways to do this, so take some time to explore different options and find what works best for you and your team. Keep in mind that there is no "right" way to do things; what matters most is that you find a system that works well for you and sticks with it over time.


Building an HR department from scratch might seem like a daunting task at first glance, but it doesn't have to be! By taking some time to define the scope of your department, develop standard operating procedures, create a budget, hire qualified employees, and get organized, you can set yourself up for success from day one. Best of luck!


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