Ethan A. Winning

How many employees should a company have before there is a need for an HR Department? As companies grow, there is a need to administer the HR function, but that doesn't necessitate an HR Department. In fact, the experience has shown that until the company has at least 50 employees, that " department" – really a function – can consist of or be handled by one person often much to the dismay of that one person.

From recruiting to orienting new employees, from writing job descriptions to tracking attendance, and from instituting and monitoring policies to monitoring benefits, there has been a need for an HR generalist to assist senior management in both establishing a structure to holding down costs of administration.

Let's say that you have been hired or requested to establish an HR function. What do you need to do?

The first step is to determine what the expectations are of the manager who realized the necessity of the function. In very small companies, this is often the owner or most senior manager who just returned from a seminar or workshop where an attorney – or a whole herd of attorneys – has scared the hell out of him or her by pointing out the complexities of complying with federal and state labor codes. Using some of the responsibilities listed below, develop a job description with that manager which at least outlines what the job entails.

After that, determine the compliance issues which pertain to your company. The most basic of these have to do with wages and hours of work, classification of employees, leaves of absence including maternity and family leaves which differ from state to state, harassment, and a host of others.

Then, determine whether or not you need to have an employee handbook or other formal policies and procedures manual to cover everything from establishing the company as an at-will employer to benefits. If a handbook already exists, be certain that it is in compliance with federal and state regulations and that the policies and the way they are written are in the best interests of the company.

Are all the basic policies included? These can be thought of as grouped into conditions of employment, benefits, and disciplinary processes. Is there a balance between stated corporate and employee rights and obligations?

Take a look at existing employee files or, if no files exist, gathering all the papers into coherent personnel files. Minimally, you should have an Application for Employment form or resume, any insurance forms that the employee may have signed, and performance appraisals.

Benefits administration is and should be separate from payroll. Further, you will have the responsibility of being the source for answering questions about all forms and types of insurance, the differences in options, and the cost to employees. One of the ways that HR can contribute to the company is by keeping the costs of benefits down, and this means auditing the policies periodically to be certain that there haven't been increases in premiums either directly or indirectly through a decrease in benefits.

One person should be responsible for new employee orientation. In order to inform new employees of their benefits and the policies of the company, you will have to be the expert in benefits and policies of the company.

What you will have to do is to become proficient in writing or formalizing job descriptions. HR has an information function that you should think through. Changes in policies, changes in benefits, even changes in laws must be communicated to all employees. Therefore, HR becomes a kind of pass-through in the information cycle.