What is human resources?

Human resources (HR) is the department within an organization that manages people—it supports employees and oversees the employment process from hiring through to departure.

HR works closely with management. It helps the company comply with changing labor laws while managing employee benefits and administering much of the hiring process.

An HR department’s responsibilities vary by organization. But generally speaking, HR connects management and employees and plays an integral role in the company’s success.

What is the purpose of HR?

The purpose of an HR department is to handle the “people” side of an organization. HR professionals provide structure and keep the organization operating smoothly. They hire, train, and motivate people and serve as a resource for employees.

They’re also responsible for keeping the company compliant with labor laws, defining and enforcing workplace culture, and working with management to create policies and procedures that protect the company and its employees.

HR can also affect the bottom line by recruiting and retaining qualified talent, negotiating benefits packages, and minimizing legal issues.

Key functions of HR

Companies assign different responsibilities to HR, but most agree it covers recruiting, training, retaining, and compensating employees. HR works to create a positive workplace and support employees while advancing the organization’s goals.

Here are the key responsibilities of most HR departments:

Recruitment and hiring

Recruitment starts with sourcing potential candidates. HR professionals place ads, review and manage resumes, and set up interviews. They work with hiring managers to narrow down candidates who meet the role’s requirements, and they may conduct interviews or sit in with the hiring manager.

Once a new hire is selected, HR takes them through the onboarding process. They provide the necessary documentation to sign, review company policies and procedures, and work with the new employee to collect payroll and benefits information.

Onboarding may also cover company handbooks, uniforms, or any other specifics the employee needs before they start working.

Training and development

HR administers training programs to help employees improve their job performance or develop their skills. Some training is required by law; some is voluntary. Most employees want their employers to invest in their careers with opportunities to learn new skills or sharpen existing ones.

Development opportunities are essential for retention. Even when another organization delivers the training, HR is ultimately responsible for identifying the need and scheduling the sessions. Smaller companies may train in house or offer a tuition reimbursement program.

Employee relations

Employees are happier, have higher morale, and are more productive in a positive workplace. HR can help with employee relations by engaging employees and asking for feedback on common benefits and policies.

The HR department also provides procedures for dispute resolution. That may not erase the dispute, but it gives employees confidence they’ll be treated fairly and with respect.

HR can also work with management to encourage teamwork—planning team-building activities outside of work, or setting up friendly competitions between teams for a small reward. Whatever the method, better employee relations improve the bottom line by boosting employee retention and productivity.

Compensation and benefits

HR works with management to ensure employees are paid a competitive, fair salary. They research job categories in a geographic location and make recommendations based on the data they compile. They may also negotiate to find the best benefits package for employees, and when benefits change, they communicate the changes.

Some HR departments process payroll themselves; others work with the accounting department or a third-party payroll company. Either way, they’re responsible for communicating any changes—to payroll, benefits, or personal information—promptly.

Performance management

HR departments implement and maintain performance management systems, enabling managers and supervisors to have constructive, consistent conversations with employees about job performance. HR professionals act as liaisons between managers and their employees, keeping the conversation positive while promoting the company culture.

HR is also responsible for keeping employee files updated and accessible.

Legal compliance and labor laws

Labor laws change constantly, and federal, state, and local laws must be understood and monitored. Keeping the company compliant is the HR team’s responsibility: policies must be enforced, workers correctly classified, and fair hiring practices observed.

Compliance can involve anything from creating and documenting policies to enforcing them—and flagging non-compliance when it occurs.

What skills do you need to work in HR?

Each company has its own education and experience requirements. Generally, you’ll need to be a good communicator and computer literate.

A few essential skills:

• Communication skills: essential for any position in human resources. HR work requires excellent verbal communication plus writing skills for various documentation.
• Being a good listener: as a liaison between employees and management, you should be able to actively listen while noting details and demonstrating compassion.
• Administrative skills: essential for organizing, entering data, and multitasking.
• Data literacy: HR analyzes and compiles data about salaries, recruitment, and performance.
• Computer skills: each company uses different programs, but HR employees should be able to navigate systems effectively.
• Conflict resolution: HR employees should be good at resolving conflicts, exercising discretion, and presenting a patient, calm demeanor.

HR challenges

Here are some of the most significant challenges HR departments face:

Adapting to a diverse workforce

A diverse workforce brings its own HR challenges. You’ll need to know and address the needs of employees across different age groups, genders, cultures, and nationalities. Technology has widened the candidate pool, but it can also complicate efforts to make local teams more diverse.

Keeping up with changing labor laws

Labor laws are always changing, and staying on top of them is hard. Failure to comply with evolving laws and regulations can result in stiff penalties for the employer and negative press.

Addressing workplace conflicts

Workplace conflict is a normal part of doing business, but handling it well is a challenge.

The HR team is responsible for finding the root cause of the conflict, offering mediation, and helping the parties involved reach a resolution—all while preventing the conflict from escalating and harming employees or the company.

Managing a labor supply shortage

Tight labor markets remain a major challenge in North America. Contributing factors include:

• The aging population
• A long-term decline in labor force participation
• A lack of childcare
• A wave of early retirements
• Fluctuations in immigration levels

HR management strategies

Human resource management (HRM) is a strategy for managing employees and an organization’s culture. It focuses on every phase of the employee’s journey within the organization, from recruitment to retirement or moving on to another job. It lets HR play an active role in improving the workforce, saving time and money.

Strategic HRM covers developing and implementing approaches to hiring, keeping, motivating, and managing the workforce while complying with laws and treating employees and employers fairly.

It promotes employee engagement, reducing turnover and giving companies a competitive advantage. The strategic results trickle down to create added value for customers, stakeholders, and employees.