So when do we know that we finally need an HR department

Every time we have gone recruiting at B-Schools in the Pune and Mumbai region, the Q&A session post our pre-placement talk always includes this question, "Are you also hiring for HR roles?" Our answer that we don't have an HR department is promptly followed by, "How can you manage without an HR department?" Well, we keep things simple.

We use the simplest formula allowed by law to compute the Provident Fund amount for each employee, a fixed amount that does not need to be recalculated every month.

We do not police the system to track number of days off for each person. Sure there is a process to apply for leave online so your team is not caught off guard when you disappear for a few days. But leaves are managed by a code of honour. If you take a couple more in a year, we figure you have probably worked a couple of weekends. If you have worked more than a couple of weekends, we also have compensatory off days. Of course if people start noticing that you are strangely missing on more than a few days, then expect to have a chat with your team lead or manager.

Monthly payroll is computed by a spreadsheet macro and instructions are sent to the bank.

Appraisal discussions are scheduled by each person with his or her team leader or manager. The appraisee, not the boss, owns the responsibility of ensuring that these get done at least once a quarter. This ensures there are no nasty surprises at the end of the year.

Recruitment is something all managers take active part in. We take pride in interviewing every person ourselves - no shortlists need to be made by anyone or by any department.

There. We have just covered recruitment, leave tracking, payroll processing, statutory requirements, and the appraisal process.

That leaves employee engagement. I am going to be forthright on this one. If the work is not fun and challenging, then monthly gala parties are not going to make up for the gaps.

We would like to believe that we have a great friendly working environment and people enjoy coming to work. Even though we have grown to a 100 strong team, we all know each other by name.

All that being said, I cannot help wonder if there is a threshold size beyond which it might become imperative to have a dedicated HR department. At that point in time, we are going to be faced with the challenge of trying to identify the traits we want to look for in the people we hire for HR.

Advice is genuinely welcome.