In many smaller organizations, the owner handles HR functions. Or, an employee in a position unrelated to HR handles them. That’s true for many startups and small businesses. Early on, that can make sense from a practical and financial standpoint. But as organizations scale and evolve, their need for a dedicated HR team grows.
Maybe that’s the position you find yourself in now. Your growing business needs a capable team to tackle the growing HR workload. And you may be tired of putting in long hours filling multiple roles. But right now, it’s just you (or another staff person). Worry not—we’ll explain how to put a first-class HR team together. First, though, let’s examine its purpose and key functions.
1. The Case for A Dedicated HR Team
2. The Purpose and Key Functions of an HR Team
The Case for A Dedicated HR Team
Seventy percent of companies with 5 to 49 employees assign HR tasks to staff with no experience in them. And 81% of these staff feel they’re not up to the task, SHRM reports. That makes sense, as 82% have no HR training! After hiring their tenth employee, organizations often look for an HR professional.
As organizations expand, an HR team becomes more essential. With shifting compliance regulations, a company could easily miss an important detail, for instance. A dedicated HR team safeguards against such issues while helping the business run smoothly. And, of course, it alleviates the workload of those juggling HR alongside their main role.
The Purpose and Key Functions of an HR Team
The HR department handles a broad array of functions related to talent management. By doing so, it maintains positive employee relations and makes the best use of its personnel. Additionally, HR ensures the organization follows regulations that pertain to employees.
HR personnel handle important duties such as these:
- Administering benefits
- Handling employee concerns
- Staying current with compliance laws
- Training personnel
- Resolving workplace conflicts when needed
- Defining policies and procedures related to employee-centric issues.
The HR team crafts policies and procedures that align with relevant regulations. For instance, they design workplace safety policies. They inform employees about policies and instruct them on how to access benefits. Additionally, they help ensure that managers and employees are following proper protocol. They may also mediate an occasional conflict. Further, they manage payroll and track salaries to ensure equity.
HR also plays a core role in creating organizational culture. They may devise wellness incentive programs to encourage work/life balance and self-care. Such initiatives are becoming an increasingly important part of HR.
The Expanding Role of HR
According to Deloitte, 85% of companies believe their HR needs to transform in order to address shifting priorities. Many companies are therefore revamping their HR to focus on more strategic priorities. That can mean either adding new positions or rethinking the scope of roles.
Technological changes are also propelling this shift. Increasingly, technology is automating more repetitive HR tasks. This frees up HR managers to handle higher-level responsibilities. Today’s HR directors often assume an advisory role to company leadership. For example, they may assist organizational directors with succession planning. They may help leaders understand performance management data. They also develop initiatives that promote inclusion in hiring practices and workplace culture.
Moreover, a great HR team creates an outstanding employee experience. They do this by prioritizing employees’ development, soliciting their feedback, and addressing concerns swiftly. HR can play a key role in fostering a learning culture, notes McKinsey. This is especially important as roles become more fluid and structures become flatter in some organizations. HR can help employees improve to become more well-rounded and agile.
Companies with high-impact HR departments can better adapt to change, Deloitte found. They display greater efficiency, innovation, and customer service. These strengths lead to enhanced overall success for the organization.
Assembling Your HR Team
Launching an HR team requires several crucial steps. We outline how to determine what your workplace needs in an HR team. We’ll also discuss some key aspects of the hiring process.
Conduct A Needs Assessment
Determine your most crucial needs. What will HR staff be focusing on first? Identify your high-priority tasks so you can clearly explain them. By doing so, you’ll make a stronger impression on candidates. For example, critical HR responsibilities may include the following:
- Designing a performance review system for use across the organization.
- Reevaluating employee benefits and working with leaders to improve them.
- Creating a more inclusive recruitment plan.
- Revising the employee handbook.
- Designing a thorough onboarding process.
- Creating formal job descriptions.
You may already have some of these elements in place. Others may need to be formalized. For instance, your core group of employees may understand their roles well. However, you need to craft written job descriptions for continued use.
Identify long-range responsibilities as well, such as these:
- Conducting implicit bias training for all staff.
- Coaching managers on how to deliver performance reviews.
- Recruiting and onboarding new employees.
- Analyzing performance management data to identify needs for improvement.
Then, determine which responsibilities need to be handled by internal staff. Of course, you’ll need to consider how many roles your budget allows for as well. Organizations sometimes opt to outsource certain functions.
For instance, you’ll probably handle performance management in-house. However, you could outsource recruitment, payroll, or benefits admin if you choose. Software can also help staff effectively handle many HR functions, as we’ll discuss.
Define Your HR Team’s Structure
An HR team can have a hierarchical structure or a flatter structure. Neither is necessarily better. The best choice may depend on how your organization is structured. If you have more agile, self-directed teams, a chain-of-command HR structure may not work.
On a flatter team, most roles have an equal ranking. The only person in a supervisory role may be the HR manager (or director). The manager may supervise several or more HR professionals. They may all make key decisions together, taking guidance from staff with specialized knowledge.
A very large organization might adopt a matrix structure. This means different branches of the company have their own HR departments. This decentralized approach can be combined with a central HR team that advises them all, SHRM notes.
A large organization may also have multiple staff devoted to different specialties. For instance, it might have a recruitment director as well as recruiters who report to him.
For a smaller (or medium-size) organization, resist the urge to make things too complex. You probably don’t want a lengthy chain of command. Stick to the essentials, as you can continue to grow your HR team as your company evolves.
Hire an HR Manager
Hire your HR manager before hiring for other positions. (This role could also be called “HR director.”) Then, your HR manager can help make other hiring decisions. This person should be well-versed in the full spectrum of HR functions, as this sample job description shows.
How to make the right decision? Look at candidates with experience in organizations of a similar size, says SHRM. Also look for the nine most important qualities in an HR manager, according to SHRM’s Competency Model:
- Relationship management
- Ethical practice
- HR expertise
- Business acumen
- Critical evaluation
- Global and cultural effectiveness
- Leadership and navigation
A healthy balance of these qualities will help an HR manager excel. To assess candidates, ask questions like the following:
- “What specific areas of HR do you have the most experience in? The least?”
- “Tell me about your HR management style.”
- “What ethical principles do you follow in your work?”
- “Think of a challenging experience you’ve had with an employee. How did you handle it?”
- “Describe any efforts to promote diversity and inclusiveness you’ve been involved with.”
- “Do you have experience improving efficiencies and reducing costs for an HR team?”
- “How have you approached recruitment?”
- “Have you ever had to address conflict on the HR team itself? Tell me about that.”
In addition to the needs you’ve identified in step one, your chosen candidate may have powerful insights. She can help identify where processes, policies, and documents need to improve. Then, she can lead the effort to remediate them.
Hire Additional HR Roles
How many HR staff do you need? The average ratio of HR staff to employees is 2.57 per every 100 employees. For smaller organizations, the number rises to 3.4. For larger companies, it drops to 1.04.
A small HR team may consist of an HR manager and an HR generalist, says SHRM. The manager focuses on complex and strategic issues. Meanwhile, the generalist focuses on day-to-day tasks like benefits admin, as this sample job description shows. (This role is also sometimes called an administrator.)
Similarly, you could also have two HR staff who report to the HR director. They may each specialize in a priority area (or several areas) like onboarding. Alternatively, one could be a specialist, and the other could serve as an administrative assistant. This sample job description outlines an assistant’s typical duties.
A more robust HR team can include specialists in a variety of roles, as SHRM notes. For example, a larger organization might hire HR staff in roles like these:
- Compensation and benefits coordinator
- Director of safety and wellness
- Chief diversity officer
- Compliance manager
- Employee relations manager
- Recruitment coordinator
- Director of employee experience
- Human resource information specialist (HRIS)
The chief diversity officer role is becoming quite popular, especially for larger organizations. It involves coordinating diversity, equity, and inclusion (DEI) initiatives. Meanwhile, the HRIS role requires knowledge of both tech and HR. It involves keeping employee data secure and spearheading the adoption of new technologies.
Companies are often rebranding and revamping roles—and adding new ones. For example, Airbnb rebranded its CHRO role as global head of employee experience, says McKinsey. And Genentech has a position called Head of People Analytics. (In the future, we may see titles like “Human-Machine Teaming Manager” and “VR Immersion Counselor,” predicts HBR.)
Here are a few sample role-specific questions for interviews.
For a compensation and benefits coordinator
- “Describe how you’ve handled benefits orientation for employees in the past.”
- “Have you led any changes in organizational benefits policies before? Please explain.”
- “What efforts did you make to ensure employees received equitable compensation?”
For a recruitment coordinator
- “How have your recruitment methods changed over time?”
- “What steps do you take to understand the position you’re trying to fill?”
- “Describe how you communicate with candidates throughout the process.”
Next, you can create a simple visual representation of these roles.
Create an HR Team Chart
Put together a chart showing who reports to whom. Your chart will visually outline the HR team’s structure and relationships between roles. This will help HR staff learn how communication should flow. Further, it will show all employees which HR staff handle particular issues. Publicize the chart widely as you introduce the HR team.
Choose the Right Tools
Select performance management software to enhance your HR team. Embrace innovation by digitizing your processes as much as possible. Good software will help you effortlessly maintain thorough records and leverage performance data. “For companies with a small but growing HR team, software picks up the slack to make a small team feel super human,” writes Entrepreneur. Select software for areas where you want to minimize staff time, like payroll, too.
Make sure the HR manager approves of the prospective software. The HR manager will probably want to demo the products before finalizing the choice.
Building a stellar HR team will improve employee relations and performance. Knowledgeable HR staff will help instill vital skills in employees and managers alike. Plus, they’ll stay on top of compliance issues. By hiring for the right roles, you’ll ensure HR stays focused on strategic priorities.
And by designing the right team structure, you’ll enhance HR workflow and effectiveness. As a result, engagement and morale will improve throughout the organization.
Interested in learning how our software can accentuate your HR? Demo our product to find out for yourself!