{"id":15674,"date":"2023-09-05T10:13:31","date_gmt":"2023-09-05T09:13:31","guid":{"rendered":"https:\/\/www.sage.com\/en-gb\/blog\/?p=15674"},"modified":"2025-08-27T13:30:58","modified_gmt":"2025-08-27T12:30:58","slug":"set-up-hr-team-step-by-step-guide","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-gb\/blog\/set-up-hr-team-step-by-step-guide\/","title":{"rendered":"How to set up an HR team: A step-by-step essential guide"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-gb\/blog\/category\/people-leadership\/\" class=\"entry-header__link\">People &amp; Leadership<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tHow to set up an HR team: A step-by-step essential guide\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2023-09-05T10:13:31+01:00\">5 September, 2023<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"How to set up an HR team: A step-by-step essential guide\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-gb\/blog\/set-up-hr-team-step-by-step-guide\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/author\/jessicafuhl\/\">\n\t\t\t\t<img decoding=\"async\" alt=\"\" src=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2020\/10\/Jess-fuhl.jpg\" class=\"entry-author__image\" height=\"40\" width=\"40\" fetchpriority=\"high\" \/>\t\t\t\t<span class=\"entry-author__name\">Jessica Leyshon<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n<p>We all know that HR is more than just \u2018fire and hire\u2019. It\u2019s responsible for one of the company\u2019s biggest assets: its people.<\/p>\n\n\n\n<p>If you\u2019re a business owner who is in the process of getting your company off the ground, or perhaps the head of finance or operations tasked with creating an HR function from scratch, this step-by-step guide will take you through everything you need to know.<\/p>\n\n\n\n<p>This guide is also useful for anyone who may be a company\u2019s first HR hire and is thinking about the task ahead and what needs to be done to create an established HR practice in a company.<\/p>\n\n\n\n<p>There are four phases to setting up an HR function. We highlight them in this article.<\/p>\n\n\n\n<p>Here\u2019s what we cover:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"#one\">Phase 1: Understand your business and define objectives<\/a><\/li>\n\n\n\n<li><a href=\"#two\">Phase 2: Everything you need to do to build your HR function<\/a><\/li>\n\n\n\n<li><a href=\"#three\">Phase 3:<strong> <\/strong>Ready, set, go \u2013 how to deliver against your HR plan<\/a><\/li>\n\n\n\n<li><a href=\"#four\">Phase 4: Get set up to grow and future-proof<\/a><\/li>\n\n\n\n<li><a href=\"#off\">Off you go<\/a><\/li>\n<\/ul>\n\n\n\n<p><span style=\"color: rgb(0, 0, 0); font-family: Calibri; font-size: 14.6667px;\"><div class=\"single-cta\">\n\t<a\n\t\tclass=\"button button--primary gate-a077ab0f-5499-4fb7-adac-a1037bb604b3\"\n\t\trole=\"button\"\n\t\tdata-button-location=\"content_area\"\n\t\thref=\"#gate-a077ab0f-5499-4fb7-adac-a1037bb604b3\"\n\t>Download your free copy of How to set up an HR function and give your people the support they need to thrive at your business<\/a>\n<\/div>\n<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"one\">Phase 1: Understand your business and define objectives<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">1. Crystallise the company\u2019s mission and values. <\/h3>\n\n\n\n<p>Decide, with your senior leadership team, what you want the culture and ethos of your company to be and then include everyone.<\/p>\n\n\n\n<p>Grant Weinberg is the VP Talent Acquisition at Eikon Therapeutics. He&#8217;s established HR departments in 13 different regions. <\/p>\n\n\n\n<p>He says: \u201cThere\u2019s the initial step of setting up the vision, mission, and values of the company at leadership level, but then you need to bring in the broader organisation to co-create the employee experience.\u201d<\/p>\n\n\n\n<p>This will be your guiding light in everything that you do.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Define your HR objectives<\/h3>\n\n\n\n<p>Set business goals and align your HR goals to them. Decide what you want to achieve and be transparent.<\/p>\n\n\n\n<p>Setting your goals early will determine what size HR function you need and will define everything else that HR does. <strong><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Decide when the right time is to make your first HR hire<\/h3>\n\n\n\n<p>Typically, the general rule of thumb is to have one HR employee per every 70 to 100 employees, but to also have someone in place once you reach the 15 to 25 employee mark.<\/p>\n\n\n\n<p>Consider what your HR needs are both now and in the future and what HR capabilities you\u2019ll need to put in place to meet them. <\/p>\n\n\n\n<p>The kind of HR function you create will all depend on what you are trying to achieve and by when.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"two\">Phase 2: Everything you need to do to build your HR function<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">4. Decide if you buy in or outsource HR<\/h3>\n\n\n\n<p>Look at what you need and decide the best and most cost-effective way of achieving it at certain growth points, whether that\u2019s resourcing in-house or externally.<\/p>\n\n\n\n<p>\u201cIf you are a tiny company, what are your immediate HR needs?\u201d asks Grant. <\/p>\n\n\n\n<p>\u201cAnd if you are a growing company, what\u2019s the cadence of HR support that you will need at the different points of the company size, growth, culture, compliance needs? <\/p>\n\n\n\n<p>&#8220;One thing you have to decide is: do I need an HR person full time, or can I buy a part-time HR service?\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">5. Decide if you need an HR generalist or a strategist<\/h3>\n\n\n\n<p>Your first hire is incredibly important as this will dictate what kind of HR function you have. Do you want a top-level strategist or someone who can execute and turn their hand to several responsibilities? <\/p>\n\n\n\n<p>Not investing the time in finding the right person could cause you more problems down the line.<\/p>\n\n\n\n<p>For Andy Salter, MD of multinational publishing company DVV Media International, which began life in 2011 with just 36 people and now has more than 100 employees across four countries, the priority was to have a generalist HR manager who understood the publishing industry. <\/p>\n\n\n\n<p>\u201cOur HR manager has been a part of our senior management team from day one,\u201d he explains. \u201cWhile everyone was in a rush to grow the business, she always ensured that we steered the business in the right direction.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">6. Understand your legal requirements<\/h3>\n\n\n\n<p>Understand your legal requirements. Failing to comply can result in hefty fines, loss of productivity, a tarnished reputation and even imprisonment.<\/p>\n\n\n\n<p>Andy says: \u201c[Our HR hire\u2019s] first few months was all about getting our policies in the right shape, getting compliance right, and making sure our legal contracts were all set up effectively.\u201d<\/p>\n\n\n\n<div class=\"single-cta\">\n\t<a\n\t\tclass=\"button button--primary gate-a077ab0f-5499-4fb7-adac-a1037bb604b3\"\n\t\trole=\"button\"\n\t\tdata-button-location=\"content_area\"\n\t\thref=\"#gate-a077ab0f-5499-4fb7-adac-a1037bb604b3\"\n\t>Download your free copy of How to set up an HR function and give your people the support they need to thrive at your business<\/a>\n<\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\" id=\"three\">Phase 3: Ready, set, go \u2013 how to deliver against your HR plan<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">7. Create an HR plan<\/h3>\n\n\n\n<p>Create a detailed action plan so that all the key stakeholders are on the same page. <\/p>\n\n\n\n<p>Clearly set out your tasks, time frames and owners. Assess your skillset, map out your career architecture and pay structure, create training strategies, plan talent management and establish your succession plan.<\/p>\n\n\n\n<p>Think of your HR plan as a practical, tactical tool that can help you determine exactly where you\u2019re going and drive your business forward.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">8. Establish legally required systems<\/h3>\n\n\n\n<p>Compliance needn\u2019t be too cumbersome or expensive with the right <a href=\"https:\/\/www.sage.com\/en-gb\/human-resources\/\">HR tech<\/a>.<\/p>\n\n\n\n<p>Alternatively, you can choose to outsource systems such as compensation, payroll, sick pay, holiday and paid time off while you get on your feet and before you buy the technology in-house to do them yourself.<\/p>\n\n\n\n<p>If you choose to invest in HR tech, think about selecting the right system that will help you make better decisions for your company as you grow. Sage offers a range of tech solutions, including feature-rich, cost-effective <a href=\"https:\/\/www.sage.com\/en-gb\/payroll-software\/\">payroll software<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">9. Map out your career architecture and pay structure<\/h3>\n\n\n\n<p>In a rush to onboard people, often new businesses hire too quickly and, before they know it, they are too top heavy,<\/p>\n\n\n\n<p>salaries are inconsistent across the organisation, which can lead to resentment and de-motivated workers, or there\u2019s an imbalance of skills in the organisation and the company is not as productive as it should be.<\/p>\n\n\n\n<p>Mapping out your career architecture and pay structure is important and needs to be done early on in your company\u2019s lifecycle. <\/p>\n\n\n\n<p>Map out what kind of skills you need and what the career architecture of your business should look like to ensure you hire the right people, pay them fairly and don\u2019t run into problems later.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">10. Build a hiring plan and get the right people in at the right time<\/h3>\n\n\n\n<p>Know when you need people in and understand that it will take them a while to be recruited, onboarded and up to speed. <\/p>\n\n\n\n<p><a href=\"https:\/\/www.sage.com\/en-gb\/blog\/hiring-managing-employees-small-business\/\">Hiring someone<\/a> can be fast but onboarding them is a different matter. <\/p>\n\n\n\n<p>You may need to wait for someone to complete their notice period, so you\u2019ll need to find a way to cover the work in this period.<\/p>\n\n\n\n<p>There will always be delays that occur that are out of your control. <\/p>\n\n\n\n<p>But you can make the onboarding process as quick and efficient as possible, so new employees can get up to speed, work productively and feel happy about their choice of employer.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">11. Create your HR policies and a handbook<\/h3>\n\n\n\n<p>Take the time to create a well-defined framework of policies. These will support cultures of trust, fairness, and inclusion by outlining the responsibilities of both employer and employee.<\/p>\n\n\n\n<p>They also safeguard your company against any unethical practice or potential litigation. Live and breathe your policies \u2013 showcase the type of behaviour and conduct you want from your employees.<\/p>\n\n\n\n<p>Andy warns: \u201cIf you are looking to sell your business in the fullness of time, you don\u2019t just need to look at your financial records, but also your HR policies, disciplinary matters and health and safety policies.<\/p>\n\n\n\n<p>\u201cYou need to show you have a good HR system and retain all your evidence otherwise you will run into problems, which will put buyers off.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">12. Create an employee handbook<\/h3>\n\n\n\n<p>Make sure your employee handbook explains what your business is and what it stands for. <\/p>\n\n\n\n<p>It should be easily accessible and part of the onboarding process for all new recruits.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"four\">Phase 4: Get set up to grow and future-proof<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">13. Establish performance management strategies and processes<\/h3>\n\n\n\n<p>Have a performance management strategy in place, and make sure your managers are having continuous performance conversations. <\/p>\n\n\n\n<p>A regular system of reviewing employee performance will help fix the gaps that could be affecting your growth.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">14. Set up your HR metrics<\/h3>\n\n\n\n<p>What does success look like? What key performance indicators (KPIs) do you need when it comes to your people? Are you looking to reach a certain headcount, have certain skills, diversity targets, etc? <\/p>\n\n\n\n<p>Decide what metrics will help your business and make sure you\u2019re using HR technology that can scale with you as you grow.<\/p>\n\n\n\n<p>Whatever your goals, the <a href=\"https:\/\/www.sage.com\/en-gb\/sage-business-cloud\/hr\/\">right HR data<\/a> will help you reach them. <\/p>\n\n\n\n<p>Consider how you\u2019re setting yourself up for the future and ensure you\u2019re collecting and analysing data in a secure single source of truth.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">15. Monitor, measure and optimise success<\/h3>\n\n\n\n<p>Regularly revisit short term and long-term company objectives. Ensure your HR function is always supporting and contributing to your company goals.<\/p>\n\n\n\n<p>It can be easy to get caught up in business as usual, but in real life, nothing is usual about business. <\/p>\n\n\n\n<p>There are market challenges, competition, changing consumer habits and digitalisation, and businesses must be agile enough to develop, innovate and progress. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"off\">Off you go<\/h2>\n\n\n\n<p>Your people are the lifeline of your business, and HR is a vital function to direct and steer them. <\/p>\n\n\n\n<p>However, you choose to implement your HR, with the right intention, you\u2019ll create the business you always wished for with your biggest asset set up for success \u2013 your people.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">How to set up an HR function<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p class=\"\">Get your free step-by-step essential guide with everything you need to know to set up an HR team, including tips, tricks, and potential pitfalls.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-a077ab0f-5499-4fb7-adac-a1037bb604b3\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download your free guide<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1215\" height=\"810\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2023\/09\/GettyImages-1338373163-1215x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2023\/09\/GettyImages-1338373163-1215x810.jpg 1215w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Join more than 500,000 UK readers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-b1a63862-3fa0-4a5e-bb67-c76b88bbc6b8\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-1073797282-1-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-1073797282-1-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Everything you need to know about setting up an HR team, in 15 essential steps. <\/p>\n","protected":false},"author":1118,"featured_media":11541,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[10],"tags":[15,41,234],"business_type":[4],"lilypad":[],"context":[],"industry":[],"persona":[69,73],"imagine_tag":[92,217,109,218],"coauthors":[397],"class_list":["post-15674","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-people-leadership","tag-grow-business","tag-hr-process","tag-hr-payroll-benefits","business_type-small-business"],"sage_meta":{"region":"en-gb","author_name":"Jessica Leyshon","featured_image":"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-1252669747.jpg","imagine_tags":{"92":"HR and Payroll","217":"HR processes","109":"Small business","218":"Top HR resources"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice 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