10 HR Essentials


One of the most neglected functions in business is human resources (HR). Sometimes it is viewed as a cost center and it gets sidelined in favor of company operations and sales. Often companies don’t realize the importance of having strong HR function until it’s too late, and it gets implemented in a reactive way to solve issues like employee absenteeism or harassment. Creating an HR department in a new or established company is a lot of work, but you don’t need to do it all right away. Here are 10 key building blocks to get you started:

1.      Job Profiles:  You need to know what every employee in your company does and create a document that describes everyone’s individual role. You want to make these role descriptions fairly detailed so that they can be used for hiring and cross training. Knowing what tasks and responsibilities each employee has, what qualifications they possess, and what makes them successful, is also useful for conducting performance reviews.

2.      Organizational Chart:  You need to have a thorough understanding of your company structure to do effective workforce planning. Reporting relationships, interdepartmental communication, and salary scales are also built on the organizational structure.

3.      Staffing Plan:  Do you know how to go about replacing an employee? An effective staffing plan tells you what to do when an employee leaves – whether you saw it coming or not. If you have someone that is going on parental leave in 3 months, your staffing plan will tell you what to do now so that there will be someone to cover their work while they’re gone.

4.      Recruitment System:  A system of spreadsheets and email records may get you by for now, but as you grow you’re going to need a better way to track open positions and incoming candidates. There are a number of affordable applicant tracking systems (ATSs) that can help you keep track of your applicant workflow. When evaluating potential ATSs, look for ones that are known for their customer service and offer a free trial period.

5.      Benefits and Perks:  What kind of benefits and perks can you offer that are meaningful to your employees? Would they prefer a cafeteria-style benefits plan that offers some flexibility? Is there anything you can offer beyond the traditional health benefits that will help you retain and attract new employees? Get creative and think about options like working from home, onsite fitness facilities, and discounted equipment rates. Record all of the benefits and perks you offer and make the list accessible so that employees know what’s available to them.

6.      Vacation Policy:  Who gets what days off? Aside from the statutory holidays, you can craft a vacation policy to suit your company. If different types of employees get different days off, you should make this clear – employees WILL ask.  For sick days and other time off, you should include expectations around number of days, permissions, notices, and whether employees need to find someone to cover while they’re gone. Don’t forget to include a recording system so that you and your employees know how much vacation time they have left.

7.      Performance Measurement:  Monitoring performance is absolutely essential – you want to tell your employees how they can improve, and they need feedback about what they’re doing great and how they can progress their career. Creating templates for employees and managers to use during review meetings is essential to ensure that the performance review process is consistent and measurable

8.      Expense Management:  You can make expenses easy to track and manage for everyone by having a clear policy and an easy way to record them. There are lots of apps that are affordable and make expense tracking a breeze for both you and your employees. Your expense policy should include things like: normal per diems, mileage rates, and eligible expenses. It should be clear and comprehensive so that there are no surprises about what’s covered and what’s not.

9.       Training and Development: Having a training and development policy is important because it’s a key part of what you can offer your employees. Training and development activities can scale depending on your company size and budget, but they encompass things like mentoring programs, professional dues, conferences, and ongoing education. Tap into the expertise of your management group as they’ll have a good understanding of what training is needed for your employees to grow and excel at their jobs.

10.   Terminations:  Eventually someone will quit or you will have to terminate someone for cause. Turnover is going to happen and you need to have a process to handle it. Do you allow the employee to continue working with notice? Do you conduct an exit interview? Do you follow a formal verbal and written warning process? Do you provide them with outplacement services?  Answering these questions ahead of time will help make the termination process less messy for you and your employee.

Hopefully you agree that these 10 HR building blocks are both necessary and achievable. If you don’t have the time or expertise to develop each of these functions in-house, outsourcing it can help you get there faster. If you’re thinking about using a third party, look for providers that have worked with companies in your industry, or companies of a similar size, so that they’ll have a good understanding of your business and lifecycle stage. Asking for customer references and following up with those references is also key – you want to make sure that they can deliver on all their great promises!     



Rodney Steele