Human resources refer to both the people working for an organization and the department responsible for managing the life cycle of each employee. But if someone mentions human resources in a work setting, more often than not they are referring to the human resources (HR) department.
Human Resources Defined
Human resources are responsible for recruiting, onboarding, training, and managing an employee from their job application to final severance. This end-to-end management of employees includes strategies for payroll and benefits administration, upskilling, establishing positive workplace culture, optimizing employee productivity, handling employer-employee relationships, employee termination, and more.
Human resource management should not be confused with workforce management, which focuses on strategic planning for the direction of an organization’s growth and not on the day-to-day supervision of employees.
The Role of Human Resources
Every business wants to do right by its employees, but business considerations often throw a wrench into this good intention. The human resources department is there to formulate policies that strike a balance between employer and employee interests.
The modern human resources team has moved beyond the legacy responsibilities of payroll and benefits administration, severance handling, and postretirement relations. Now it encompasses designing strategies to acquire the right employees, ensure employee retention by addressing their challenges, manage employee separation, handle compliance and legal issues, and stay on top of the HR industry trends.
Recruitment
Human resources are responsible for filling vacant positions within an organization. The recruitment process typically includes creating and posting job descriptions, accepting applications, shortlisting candidates, organizing interviews, hiring, and onboarding. Each of these recruitment steps involves designing the workflow and executing it in a way that ensures they hire the best candidates. Many teams rely on recruitment software to help automate these processes.
Compensation and Benefits Administration
Handling employee compensation and benefits is an important part of human resources responsibilities. In addition to payroll management, this includes travel and expenses, paid leave, sick leave, retirement, health, and other benefits.
talent management
Recruitment is an expensive process and hence it is important to ensure that the new employees stay with the organization for as long as possible. Employee training and development, whether a new hire or an old hand, in consultation with managers, is the responsibility of HR.
To this end, HR departments use talent management to design various employee motivation, loyalty, and retention programs. Career development, mentoring, succession planning, and interdepartmental transfers are important ways to ensure employee retention.
Other Responsibilities
To cover everything a human resources department handles would take an entire article of its own, but here are the most common responsibilities of the modern human resources department:
Designing workplace policies: HR is responsible not only for hiring people but also for ensuring that the workplace is conducive to optimal functioning. They ensure this by designing workplace policies in consultation with senior management.
Legal Compliance: The HR department needs to be aware of the latest laws that affect the employees as well as the organization.
Employer-employee relations: The human resource department is responsible for managing people in such a way that the relationship between employer and employee remains cordial at all times. This becomes especially important for manufacturing units where labor laws are also applicable.
External Factors: HR also needs to keep track of those external factors which are not under its control but definitely affect the organization and its employees. For example, the use of technology, global growth, social media networking, the growing popularity of hybrid work models, etc.
Diversity, Equity, and Inclusion (DEI): If you want your business to be successful, you must adopt policies and programs that promote DEI. Designing strong recruiting policies is a good place to start, but HR must take it forward by helping all stakeholders develop a DEI mindset.
Internal vs. External Human Resources
Depending on the size and needs of your business, you may have an in-house human resources department or outsource it. Keep in mind, however, that only certain parts of human resources, such as payroll, benefits administration, recruiting, onboarding, legal compliance, etc., should be outsourced. The designing strategy for managing human resources should be kept internal to the organization.
Human resource outsourcing can be cost-effective for small teams because you get better capabilities and easier access to experts. However, you need a small HR team of one to two people internally to design the necessary policies and ensure that the external HR team is meeting all of your specifications.
Ultimately, whether you hire an internal HR team or an external one depends on your needs and budget.
Bottom Line
Human capital is the most important resource of any organization and should be treated with love, care, and respect. As an employer, it is your responsibility to build a human resources team that will help you attract the best talent in the industry, keep them satisfied, and ensure great relationships that result in business growth.
