Building an HR Department for Scale the Right Way
In my 15 years in HR, I’ve had the opportunity to create the first HR function with three different companies. Being that first HR person in a scaling organization is an exciting, heavy lift. Typically you have minimal resources & minimal guidance. You are the internal HR expert and everyone seemingly needs things done faster. Sounds awesome, doesn't it? Thankfully, there are some tried and true guidelines that scale across organization size, industry, and culture.
Define Your Process and Automate It
If your company is moving in the right direction there will always be more people to hire, more paperwork to file, more onboarding and recruiting, and more events to be handled. All too often though, this is all done manually.
Scaling an HR department should start and stop with automation. Automating processes can come in many shapes and sizes. For instance, are you still reconciling your insurance bills by hand? There is an EDI/API feed for that. Are you still having offer letters created and signed by hand? Does it make sense to outsource your VOE’s or unemployment claims? There is an opportunity to do that. Heck, in this day and age, there are even ways to completely automate your open enrollment meetings.
The automation of tasks is happening in every department around you. Development doesn’t compile their code by hand. Sales doesn’t sign every contract with a wet signature. Finance doesn’t balance their P&L with an abacus (although I am sure they will share theirs with you if needed). HR needs to make sure we are keeping up. There are several inexpensive solutions to look at that are start-up price friendly. A couple of local companies that are in this space is EddyHR, BambooHR, ApplicantPro.
Ask the Right Questions
We live in a great community with incredibly educated, qualified individuals who have walked in your shoes. Don’t be afraid to reach out and ask for help. The HR community in Utah is strong and giving.
I have been the beneficiary of this generosity many times. All it took for me was a mutual connection introducing me, a LinkedIn message, or a handshake at a local event (you know, when we used to do those things). Be smart, strategic, and respectful of their time but don’t be afraid to reach out.
As you ask the right questions, be sure to look internally too. I greatly respect people who try to fix a problem, can’t find the solution, and then come to me and say “I just don’t know, can you help me?” I personally jump at the opportunity. When one of us succeeds, we all succeed.
Strategy is ever-evolving and imperfect, it's also is a language you need to learn. When you start to build your HR strategy break it down into smaller bites. It doesn’t need to be carved into stone that was found at the top of Mt. Olympus, but it should be a guide for you.
What is your recruiting strategy?
Are you price-conscious or budget-strapped? Do you need heavy-hitting talent as you build out your sales organization or are you the type of company that wants to invest in your internal pipeline and promote from within?
What is your total rewards strategy?
Are you going to lead the market in compensation but lag in benefits? What stage is your company in (startup, growth, maturity, decline) and what do you have to offer that is unique? Do your employees understand your options program? Some people care about free lunch, some care about going home early on Friday. Some want great benefits and are willing to take less pay to get it, some employees are just here for the Benjamin’s.
Develop your strategy and then evolve it as the company evolves.
Know your business
Lastly, but most importantly, you have to understand how the company works. Make sure you know how your company makes money. Are there multiple revenue lines and what are the margins? How do you acquire your customers? Is one line of business growing? Contracting? What is the planned product growth for the next 12-24 months?
When you know these answers you are better positioned to help the company scale. If you don’t know what the company’s plans are, how can you design the right strategy in each key area? How can you find the right candidate for your open positions? Knowing the details of these questions will allow you to make educated decisions with long-lasting consequences.
In the end, there is no one right way to start an HR department. Every company is different, every situation needs specific tweaks to it. Don't be afraid to try and fail. If you do fail, make sure you fail fast, learn and move on. One piece of advice I can give is this, hang on and enjoy the ride.