Human Resources (HR)

What Is Human Resources?

Human Resources (HR) is a department that’s dedicated to managing the entire employee lifecycle.

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This includes administrative tasks such as hiring, payroll, benefits management, and employee recordkeeping. However, it also touches on the strategic side of managing a workforce, including onboarding, employee engagement, training and development, and more.

HR teams bridge the gap between management and employees, working to create an environment where team members can thrive, feel valued, and contribute effectively to company goals.

What Does Human Resources Do? 8 Key Functions

HR encompasses a broad range of functions. Larger companies usually have separate teams dedicated to each HR task. However, many small- to medium-sized businesses have a central department that manages all HR duties.

Let’s explore the different HR functions and see what each entails.

1. Recruitment and Onboarding

Recruitment or talent acquisition involves hiring qualified individuals who align with the company’s culture and goals. This includes both campus recruitment as well as sourcing and headhunting experienced professionals.

This HR role looks at the following aspects of the employee lifecycle:

  • Identifying talent needs and skills gaps within the organization
  • Creating relevant job descriptions for open positions
  • Sourcing candidates through various channels, such as job boards, social media, etc.
  • Seeing candidates through the application process, including resume screening and interviews
  • Crafting and rolling out job offers and employment contracts

Once candidates have been selected, recruitment teams also help to establish and manage the onboarding process by providing the necessary paperwork, introducing company policies, conducting orientation sessions, assigning mentors, and enabling access to tools and resources.

This ensures a seamless transition for new employees and sets them up to contribute to company goals as quickly as possible.

2. Compensation and Benefits

This part of HR focuses on designing, administering, and managing compensation and benefits for new hires and existing employees. Ensuring fair compensation packages helps to attract top talent and motivate current employees to perform at their best.

The key responsibilities for this function comprise the following:

  • Setting employee salaries and bonuses by conducting benchmarking exercises, conducting surveys, and working with a fixed hiring budget
  • Managing the annual compensation review and appraisal process, including overseeing salary increments and bonuses, plus identifying and addressing areas of concern
  • Designing and administering benefits such as healthcare, retirement plans, stock options, and other perks
  • Ensuring compliance with minimum wage regulations and other labor laws

3. Payroll

This job primarily looks at ensuring accurate and timely payments of employee compensation.

Paying employees correctly is a critical part of keeping them motivated and committed to company goals and individual performance objectives.

Here are some of the key payroll tasks managed by HR:

  • Reviewing and paying employee salaries and bonuses through various forms of payment, including direct deposits
  • Processing timesheets for part-time employees, calculating wages, and creating payroll reports
  • Maintaining and updating payroll records, including salary raises and other bonuses
  • Ensuring tax deductions and benefits contributions have been made correctly
  • Generating pay stubs and managing other payroll-related queries

4. Recordkeeping and Data Management

This is a core function of all HR departments and focuses on managing employee data, employment records, and other information. Proper recordkeeping supports decision-making processes, audits, and legal compliance.

This role covers the following responsibilities:

  • Gathering, storing, updating, and managing all forms of employee data, including personal information, employee case histories, compensation and promotion histories, performance evaluations, training records, and more
  • Providing employees with requested paperwork, such as proof of employment records and tax and compliance documents, like W-2s, 1099s, etc.
  • Managing employee databases, ensuring data accuracy, and complying with relevant privacy regulations.

5. Employee Relations

This function manages relationships between employees and the company, setting and upholding the code of conduct and fostering a safe and positive working environment.

Here’s what the role of employee relations focuses on:

  • Drafting and implementing company and employee handbook policies
  • Handling conflict resolution and mediation between employees
  • Addressing grievances and disciplinary issues and conducting investigations in line with established procedures and labor laws
  • Providing guidance on all HR-related legal matters

6. Training and Development

Often known as learning and development, this function focuses on enhancing employees’ skill sets and supporting them in growing their careers within the company. Effective training and development teams empower employees to learn new skills, adapt to role changes and technological advancements, and boost innovation and competitiveness.

This is what learning and development roles do for companies:

  • Identify skills gaps within the company
  • Design, develop, and run training programs to promote continuous learning and bridge talent gaps
  • Promote career growth through mentorship programs, tailored coaching, development initiatives, and more
  • Track progress and gather regular feedback to ensure training courses and materials are effective

7. HR Business Partners

What does an HR business partner do? They collaborate with department heads and company leaders to align HR strategies with overall business goals. They also provide expertise and guidance on HR-related queries or concerns. Often the first point of contact, HR business partners liaise between the company and other HR functions.

This role encompasses a wide variety of responsibilities. Some of these are listed below:

  • Understand business needs and provide HR insights and recommendations
  • Engage employees through recognition programs, feedback mechanisms, team-building activities, and more
  • Run performance management and closely track employee performance, including identifying areas of concern and overseeing the improvement process
  • Manage organizational change and foster a culture of adaptability
  • Make strategic decisions, such as hiring, redundancies, and more
  • Create effective succession plans and develop contingency plans in case of key leader departures and other company crises

8. Diversity, Equity, and Inclusion

This HR role is responsible for fostering a culture of fairness and belonging for all employees. DEI is highly important and relevant to today’s workforce, who value working for a diverse and inclusive company.

DEI teams primarily work on the following duties:

  • Developing strategies and programs to promote diversity, equity, and inclusion in the workplace
  • Conducting diversity training, including unconscious bias awareness and mitigation
  • Implementing inclusive hiring practices
  • Monitoring diversity metrics and ensuring the company meets its targets
  • Identifying and addressing any red flags relating to discrimination in hiring, compensation, and employee treatment in the workplace

How Does HR Support Employees?

While HR focuses on improving a company’s overall work culture, it also provides employees with support on an individual level.

Here are some ways in which employees can benefit from a deeper level of HR support.

Career Growth and Development

HR can provide employees with tailored training, mentorship, and coaching programs. This aids in skills development, career transitions, and more. Some HR departments even have the budget for sponsoring further education and certifications to boost employee performance and loyalty to the company.

HR can also support employees with career transitions and internal mobility. For instance, if an employee wants to move into a different team, HR can help set a path for them to achieve this.

Work-Life Integration

Life happens, and many employees need to find a healthy way to balance their professional and personal priorities. HR teams can implement flexible schedules, including remote or hybrid work options, subsidized child care, and other arrangements to promote a beneficial work-life balance.

Employee Wellness

Today’s HR teams play a key role in employees’ physical and mental well-being. Physical benefits include workstation assessments to ensure employees are comfortable at their desks, health insurance, and perks such as subsidized gym memberships to improve their physical state.

Additionally, HR can organize wellness initiatives and programs focusing on mental health and stress management, often forming partnerships with external companies to provide employees with counseling and therapy when needed.

Employee Relations and Conflict Resolution

HR plays a pivotal role in fostering a safe and harmonious workplace where employees can openly express their concerns. For instance, HR will investigate and address employee grievances, mediate employee-manager conflicts, and even facilitate manager-level coaching to enhance team relationships.

What Tools Do HR Departments Use?

HR professionals have access to various types of software to streamline processes, manage data, and enhance efficiency across different HR functions.

Here are some common types of HR tools:

  • Human Resources Information Systems (HRIS) are centralized systems used to store and manage employees’ personal information, payroll and benefits details, performance reviews, training records, and other types of personnel data.
  • Human Capital Management (HCM) software provides tools to manage and optimize the strategic side of HR, including recruitment and onboarding, talent management, performance management, and training and development.
  • Human Resources Management Systems (HRMS) offer a comprehensive all-in-one solution with tools for nearly every HR function, including payroll and benefits, recordkeeping, attendance tracking, and more.
  • Applicant Tracking Systems (ATS) are designed to manage the recruitment process, including posting job openings, tracking applications, scheduling interviews, and managing candidate communications.
  • Payroll software automates payroll processes by calculating wages and tax deductions, generating payment reports, and making accurate and timely payments to employees.
  • Learning Management Systems (LMS) help with creating and delivering custom online training and development programs, as well as tracking progress and providing certifications upon completion.

In addition to these, HR teams also use software for performance management, benefits administration, compliance management, internal communications, and employee feedback.

What Does HR Do? Summing Up

It’s sometimes confusing to fully understand what your HR department does because it encompasses such a wide range of responsibilities.

HR manages everything that relates to your company’s workforce. It focuses on recruiting and onboarding, compensation and benefits, payroll, recordkeeping, setting and implementing policies, handling workplace conflicts, training and development, and much more.

Further, HR teams can provide employees with a deeper and more tailored level of support. For instance, they can help with work-life integration, mental and physical well-being, and career growth and development.

By gaining visibility into the role and importance of HR in your company, you can ensure you build the right HR team, invest in resources, and foster a safe and positive culture for your employees.

FAQs

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Yashna Wahal

Yashna has nearly a decade of experience in HR, covering topics like Talent & Development, Hiring, HR Business Partnering, Employee Engagement, Compensation and Performance Management. She's the former VP of HR at JP Morgan in London, followed by being the Head of HR at Plotify Financial in both London and New York. Yashna earned a BSC in Psychology from UCL and an MBA from Imperial College London.