Building an HR Function From Scratch: A Practical Sequence for Growing Organisations
September 4, 2026 · Uncategorized · 7 min read
Most organisations that need this guide don’t get to plan the sequence, HR arrives reactively, usually the moment a hiring decision goes wrong, a nationalisation audit request lands, or a labour inspection notice appears on someone’s desk. But there is a genuine right order to build the function in, and getting it wrong means solving expensive problems later that a slightly different sequence would have prevented entirely. This guide walks through that sequence with a single worked example carried throughout, so the steps stay concrete rather than abstract.
Worked example: a 40-person logistics startup in Riyadh, six months after its first hire
Starting point The founder has been handling HR personally: contracts drafted from a template found online, no formal policies, and hiring done entirely on personal networks. The company has just crossed the threshold where Nitaqat classification applies, and nobody has checked the current Saudi national ratio against it.
This example continues through each step below, showing what actually gets built and in what order.
The sequence, in order
Get compliant before you get sophisticated
Before anything else: confirm employment contracts match local labour law requirements, working hours and leave entitlements are correctly applied, and end-of-service calculations are handled correctly for your jurisdiction. This is unglamorous and it’s the step most commonly skipped in favour of things that feel more like “real HR,” which is exactly why it creates the most legal exposure when skipped.
Applied For the Riyadh logistics startup, step one means: auditing every existing contract against current Saudi labour law, confirming Qiwa documentation is in place for every Saudi employee (a hard requirement for Nitaqat credit as of 2026), and checking the current Saudization ratio against the applicable band before doing anything else. This alone surfaces that three contracts were never properly documented on Qiwa, meaning those employees currently don’t count toward the company’s Saudization percentage at all, a compliance gap the founder didn’t know existed.
Build the workforce plan before you build policy
Understand headcount by role, nationality mix relative to any nationalisation targets you’re carrying, and where growth is actually planned over the next 12 to 24 months. Policy written before this exists tends to be generic and gets rewritten within a year once real patterns emerge, wasting the effort spent writing it the first time.
Standardise recruitment before you standardise anything else
A consistent, structured hiring process, job descriptions, interview scorecards, a defined offer process, does more to prevent future HR problems than any policy document. Most disputes and most bad hires trace back to an unstructured, inconsistent hiring process at the start, where different interviewers assessed different things and nobody documented why a decision was made.
Applied The startup’s hiring so far has been informal referrals with no structured interview and no written rationale for any offer. Before the next hire, they build one interview scorecard per role family and a standard two-stage process. This isn’t bureaucracy for its own sake, it’s the thing that protects the company if a rejected candidate later challenges a hiring decision, and Saudi labour law disputes over hiring practice are not hypothetical at this company’s scale.
Write the core policy suite, not an exhaustive one
You need: a code of conduct, leave policy, disciplinary and grievance procedure, and an anti-harassment policy, as an absolute minimum. Resist the urge to write comprehensive policy on everything at once. A short, genuinely enforced policy suite beats an exhaustive one nobody has actually read, and a policy that exists on paper but is never applied consistently is arguably worse than no policy, since it creates a written standard the company then visibly fails to meet.
Set up a minimal performance system
It doesn’t need to be sophisticated at this stage. It needs three things: clear goals for each role, a scheduled point to discuss progress, and a documented way to handle underperformance if it arises. Build the sophistication later, once the basic rhythm exists and people are used to the idea that performance gets discussed regularly rather than only in a crisis.
Only then invest in culture and engagement initiatives
This is usually where founders and early leaders want to start, and it’s the step most likely to fail if the first five haven’t happened. Engagement initiatives layered on top of unclear roles, inconsistent policy, and an ad hoc performance process tend to surface the underlying dysfunction rather than fix it, because an engagement survey will accurately capture that people feel uncertain about expectations, which no culture event fixes.
Applied, six months later By the time the Riyadh startup considers an engagement survey or a values workshop, the first five steps are in place: contracts and Qiwa documentation are current, the workforce plan accounts for the Nitaqat trajectory as headcount grows, hiring is structured, four core policies exist and are actually referenced when issues arise, and a lightweight quarterly check-in process is running. The engagement conversation that follows is now about genuine culture questions, not about the underlying uncertainty the earlier gaps would have produced.
A note specific to the region
If you’re building HR from scratch in the GCC, nationalisation compliance needs to enter the plan at step 2, not as an afterthought once headcount has already grown past the point where meeting the target is easy. Both Saudi Arabia’s Nitaqat and the UAE’s Emiratisation framework are structured to tighten over time, not loosen, so a workforce plan that ignores the trajectory will need expensive correction later. If you operate across multiple GCC or African jurisdictions, resist copying policy wholesale from one country to another. Labour law differs meaningfully enough between neighbouring markets that a policy compliant in one can create real exposure in the next, even where the wording looks similar on the page.
Common mistakes in this sequence
Minimum viable HR function, at a glance
- Compliant contracts, working hours, and leave entitlements verified against current local law
- Digital contract documentation in place where required for nationalisation credit (e.g. Qiwa in Saudi Arabia)
- A workforce plan with headcount and nationalisation targets by role, projected 12–24 months out
- Structured recruitment: job descriptions, interview scorecards, offer process
- Four core policies: code of conduct, leave, disciplinary/grievance, anti-harassment
- A minimal performance cycle: goals, scheduled check-ins, an underperformance process
- Basic HR metrics tracked from day one: headcount, turnover, time to hire
Build it once, correctly, rather than twice
The Human Resource Management Training Course covers this exact sequence in depth, with the regional legal framework, structured recruitment, and the core policy suite built in from the start, for people setting up or inheriting HR without a dedicated team behind them.
Need In-House Training?
We run all our courses as private programmes for organisations across the GCC and Africa.
Request In-House →