What Is Human Resources (HR)?

 

Human resources (HR) is a crucial division within any business, responsible for finding, recruiting, screening, and training job applicants. It also manages employee benefit programs and plays a significant role in navigating the rapidly changing business environment and the increasing demand for high-quality employees in the 21st century.

Key Takeaways

1. Main Responsibilities: HR handles recruiting, training, employee benefits, and terminations.
2. HR Management Strategies: These focus on enhancing an organisation’s workforce to improve overall company performance.
3. Compliance: HR must stay updated with laws affecting the company and its employees.
4. Outsourcing: Many companies outsource HR tasks like payroll and benefits to focus on more strategic roles.

Understanding Human Resources (HR)

The term "human resource" was first used by economist John R. Commons in 1893. However, HR departments as we know them began to develop in the 20th century, aiming to resolve misunderstandings between employees and employers.

HR is essential for maximising employee productivity and protecting the company from workforce-related issues. Responsibilities include compensation and benefits, recruitment, retention, firing, and legal compliance.

Key HR Activities

To add value to a company, HR must effectively manage the following six activities:

1. Managing People Effectively: Ensuring the right people are in the right roles.
2. Performance Appraisal and Compensation: Linking performance and pay to competencies.
3. Developing Competencies: Enhancing skills to boost individual and organisational performance.
4. Fostering Innovation and Flexibility: Encouraging creativity and adaptability to stay competitive.
5. Work Process Design: Improving processes, planning succession, career development, and mobility.
6. Technology Integration: Using staffing, training, and communication to manage tech adoption.

HR Management Strategies

Since the 1980s, there has been a push for strategic HR initiatives, recognising the impact of employee-related issues on long-term business success. This strategic approach is known as human resource management (HRM), focusing on the recruitment, management, and development of employees to improve the organisation’s culture and environment.

An HR department employing HRM strategies actively seeks to improve the workforce, recommending processes and solutions to management. Companies like Google exemplify this by offering numerous employee perks, leading to higher productivity and job satisfaction.

HR Outsourcing

Since the mid-20th century, companies have started outsourcing traditional HR functions to focus on more value-adding programs. Outsourced functions can include:

• Payroll administration
• Employee benefits
• Recruitment and background checks
• Exit interviews
• Risk management
• Dispute resolution
• Safety inspections
• Office policies

Modern tools like recruitment software can improve HR efficiency, allowing more focus on strategic initiatives.

Role of Human Resources

HR focuses on recruiting and retaining employees, managing employee relations, and overseeing benefit programmes. It serves as the go-to department for employees with questions or concerns about their employment.

What Is Human Resource Management (HRM)?

HRM is a strategic approach to managing employees, work culture, and the work environment to maximise productivity and effectiveness. It often involves using metrics to measure workforce success.

Five Key HR Functions

1. Recruiting, Hiring, and Onboarding: Finding and integrating new employees.
2. Employee Compensation and Benefits: Managing pay and benefits.
3. Career Development: Supporting job and career growth.
4. Addressing Employee Issues: Handling work-related concerns.
5. Policy Development: Creating policies that shape the work environment.

A company’s HR department manages the entire employee lifecycle, from recruitment and onboarding to training and termination or retirement. HR must also stay current with industry trends and legal requirements. Increasingly, HR focuses on HRM strategies to build a positive, loyal, and productive workforce, benefiting the company in the long term.