Richard Branson once said,"Take care of your employees, and they’ll take care of your business. It’s as simple as that".

Dear founders and leaders, do you know that the best businesses are the outcome of the best people, and finding the best people requires the best human resource (HR) management?

Whether you are a startup or a growing business, trying to get your HR department in order can be challenging for many of you.

But only until you explore the “New HR Setup” methodology that will be covered in this blog.

Are you ready? Let’s begin.

Building an HR department from the ground up may seem overwhelming, but it’s also an exciting opportunity to create a well-structured system that can support your company's growth.

Building an HR department from the ground up is not just about hiring and managing payroll; it's about creating the infrastructure that will support your organization's culture, growth, and performance.

Whether you’re starting a small business or establishing HR for a larger organization, here’s how you can go about it in seven actionable steps.

1. Align the HR Mission with Business Objectives

Before implementing HR practices, the first step is to define an HR mission that aligns with your business’s overall goals. Ask yourself, What are the long-term objectives of my organization, and how can HR help achieve them?

This will guide everything from hiring decisions to employee engagement and retention strategies.

But how to do this?

Well, evaluate the current talent pool and growth trajectory. Have a meeting with board members and plan what the mission and vision of the company are and what kind of human resources will be required to convert that vision into reality.

For instance, if your company prioritizes innovation, your HR mission might focus on attracting top talent with specialized skills, establishing an open and creative culture, and providing continuous learning opportunities.

Organizations like Google are known for their innovative HR practices that align tightly with their broader business strategies, offering perks that attract and retain creative minds.

For example, a tech company might focus more on attracting highly skilled developers, whereas a service-based organization might emphasize customer-facing training and retention strategies.

Your HR mission should serve as the cornerstone for every policy, hiring decision, and employee engagement initiative.

2. Establish Core HR Policies and Ensure Compliance

The backbone of any HR department is built on well-structured policies that cover essential areas like employee contracts, health benefits, leave policies, and performance reviews. Establishing these policies right from the start ensures consistency and compliance with local labor laws.

Ensure your policies comply with labor laws, especially in Nepal where labor laws might differ significantly from other regions.

When it comes to payroll management, automation tools such as BambooHR can ease the burden. These systems not only ensure that payroll runs smoothly but also automate benefits, tax deductions, and employee record-keeping—helping you avoid costly mistakes.

But in the context of Nepal where international payment is a little difficult, software and tools that are available locally will work the best.

The two things to focus on are:

1. Payroll Management: Make sure you have a system in place to manage salaries, tax deductions, and benefits.
2. Employee Handbook: Your go-to guide for company policies, procedures, and expectations.

3. Design an Effective Recruitment and Onboarding Process

Now, we all know that hiring the right talent is crucial for any business. Develop a recruitment process that goes beyond simply filling positions.

Define clear job descriptions, manage candidate interviews, and set up an onboarding process that helps new employees feel comfortable and integrated from day one.

You can use the free job posting sites like LinkedIn or similar and track the applications. You can also use an automated resume ATS score calculator, available online, to do a first-level screening of resume. Later you can do manual interviews or tests.

Try to make the process of onboarding as easy as possible so that it will be convenient for candidates.

4. Implement Performance Management System

Once your team is ready, your next step must be performance management. Traditional performance reviews are being replaced by continuous feedback models, which can boost employee engagement and productivity.

An effective performance management system ensures that every employee knows what’s expected of them and how their role contributes to the broader goals of the organization.

So, what are the best practises?

Companies like Adobe have done away with annual performance reviews in favor of frequent check-ins and real-time feedback. Adopting a similar continuous improvement model will not only help employees grow but will also lead to better performance across the board.

Use tools like 360-degree feedback, which gathers insights from peers, subordinates, and supervisors, offering a more comprehensive evaluation and pinpointing growth areas.

5. Build a Learning and Development Framework

Learning and development (L&D) is a vital part of any HR department, enabling employees to continually enhance their skills and stay current with industry trends.

Whether it’s leadership training or technical skill development, a working L&D strategy contributes to both employee satisfaction and business growth.

In the book “Leaders Eat Last” by Simon Sinek, he explains the importance of leadership development and maintaining environments where trust, protection from above, and growth.

Get feedback not only from managers but from peers and subordinates to create a more well-rounded evaluation.

When employees are motivated and inspired they work better. In today’s era, forced leadership does not work anymore, but trust in leaders and protection from external challenges does.

6. Design Competitive Compensation and Benefits Packages

Compensation goes beyond just a paycheck. To attract top talent and ensure employee satisfaction, offer competitive benefits.

This includes not only salary but also health insurance, retirement benefits, and flexible work arrangements. In Nepal, ensure your benefits package aligns with local expectations while also standing out from the competition.

A great example comes from companies like Basecamp, which offers a unique work environment that includes benefits like paid sabbaticals and remote work options.

Regularly benchmark your compensation package against industry standards to ensure competitiveness. Also, provide customized perks aligned with employee needs. For instance, some might prefer additional vacation days, while others prioritize healthcare benefits.

7. Utilize HR Technology to Maximize Efficiency

Lastly, the role of technology in HR can’t be overstated. Tools like Human Resource Information Systems (HRIS) allow you to manage employee data, track performance, streamline payroll, and oversee recruitment—all in one place. Implementing these tools early on can save you time and help focus on strategic initiatives rather than manual processes.

Tools like Zoho People or BambooHR can help with automating tasks like payroll, attendance tracking, and performance management, ensuring that you can scale your HR function as your business grows.

Proper use of tools like Trello to manage and track long-term goals, Mind Mapping tools like Git Mind or Miro to brainstorm ideas visually, and other automation tools can help along the way.

What now?

Setting up an HR department from scratch can be challenging but deeply rewarding. By aligning HR’s mission with business goals, establishing policies, focusing on employee growth, and leveraging technology, you’ll create a people-focused HR function that drives organizational success.

Follow these seven steps and watch your HR department become a strategic asset for your business’s future growth.

Green Tick Nepal ’s New HR Setup service helps businesses of all sizes and types to establish new HR departments and manage all the aspects as mentioned in the steps above.

It provides comprehensive support in building and optimizing HR processes, tailored to your organization's needs. Its services cover job descriptions, salary structures, employee handbooks, performance management systems, HR software implementation, and recruitment and onboarding procedures.

It also ensures compliance with employment laws, helping establish a strong foundation for managing and nurturing your workforce.

Contact Green Tick Nepal if you need to set up a new HR department from scratch or improve the existing one.