Building an HR Department from Scratch: 7 Steps for Founders Past 50 Staff

Start with a boundary, not a job advert. List every people activity that currently lives with founders, finance or line managers — contracts, right-to-work checks, leave, payroll inputs, interviews, offers, onboarding, probation, grievances and exits — and mark each as keep with managers, move to HR this year, or partner outside.

In year one, HR should usually own employment documentation, compliance records, payroll inputs and controls, a standard hiring process, onboarding design, and escalation for employee relations. Managers keep day-to-day performance conversations. Write the ownership map on one page and share it with leadership.

Someone named, not a shared folder, must own the employee file standard: where contracts, variations, identity and right-to-work evidence, attendance, disciplinary notes and exit paperwork live, and how quickly a complete file can be produced.

Give that owner authority to refuse incomplete hires. Scattered records are an early sign that a growing company needs outside HR support, as we cover in our guide on HR partner or in-house HR. For multi-country operations, remember that public authorities decide permits and registrations — your owner tracks what was filed and what was approved, without inventing timelines.

You do not need a three-hundred-page manual on day one. You need a short handbook that settles the questions that cause disputes: hours and overtime, leave, pay and expenses, equal treatment, health and safety basics, confidentiality, grievance and disciplinary routes, and how probation works.

Keep language plain, version the handbook, record acknowledgement on hire, and train supervisors on the five policies they use most. Policies are useless if managers ignore them.

Payroll accuracy is trust. Define who submits hours and changes, who checks them, and who authorises payment. Standardise employment contracts and offer templates by role family, with controlled fields for salary, start date, location and reporting line, and store signed copies in the records system the compliance owner runs.

The people stack can stay simple: a payroll tool or provider, a lightweight HRIS or shared drive for employee data, and an applicant tracker. Process first; then tools that enforce it.

A growing company needs one hiring path every manager recognises: brief, screen, interview, decide, offer, onboard. Start with a clear job description; our guide on how to write a job description covers the rules that attract the right candidates. Use structured interviews so candidates for the same role are scored against the same criteria.

Define who can open a role, who approves budget, how many interview stages apply by level, and who owns the offer. Track a short set of recruitment KPIs such as time to fill, offer acceptance and early turnover — our article on recruitment KPIs every Head of HR should track explains how. Plan international roles early: documents and permit decisions sit with public authorities, so urgency cannot compress the calendar.

The first ninety days decide whether a hire sticks. Prepare access and a day-one plan before arrival, set 30-, 60- and 90-day goals, and schedule check-ins. A documented employee onboarding checklist keeps the experience consistent across managers and sites.

Probation should be a managed period with written expectations and a fair decision at the end. Retention basics then take over: clear pay, capable managers, a visible next step and early listening. Our guide to employee retention strategies sets out nine HR practices that reduce avoidable turnover. Measure early exits separately — they usually point back to hiring fit or onboarding.

In-house HR should own strategy, culture, final people decisions and the relationship with managers. Partners earn their place on capacity spikes and specialist corridors you do not run often enough to staff permanently: confidential C-level search, volume overseas placement, or HR staffing support when the internal team is stretched.

A useful rule: continuous core work stays in-house; bursty, multi-country or highly specialised work is partnered with a defined scope. ISHC supports that hybrid as a full-cycle hiring partner — screened overseas workforce placement from pilot to janitor, HR staffing and support, and C-level recruitment. Since 2021 the team has completed more than 310 EU deployments across Serbia, Croatia and Romania, with named client placements including a National Sales Manager for INSIZE and a C-level hire for HIOKI. When your year-one map shows gaps you cannot staff yet, send the brief through the contact page.