The Beginner’s Guide to Human Resources
There are lots of elements that make up a business. Day-to-day operations, managing finances, marketing, and dealing with the workforce are part and parcel of making an organization tick. In SMEs, they’re all often the responsibility of one individual or a small handful of people. In larger companies, each area of business has its respective department.
Whatever the size of your organization, Human Resources (HR) is one of the most critical areas. The tasks and responsibilities that fall under the umbrella of HR are vital to any business. Many professionals, though, don’t truly understand what HR does.
Some areas of business are self-explanatory. Warehouse management regards the arrangement and operation of your warehouse. That’s pretty easy to get your head around. If you ask someone to define HR, they’ll likely say something about hiring and firing. That’s merely scratching the surface.
This guide will help you get to grips with what HR is, what it does, and why you might need to give it more attention.
What is Human Resources?
Human Resources (HR) is a field dedicated to managing everything related to a business’s workforce. The HR manager or department at a company is responsible for staff. It must manage their needs, their interactions with the firm, and all other business practices related to the workforce.
You might well be thinking at this point that that’s pretty much everything. You’re not far off the mark. The duties of an HR professional will impact most aspects of an employee’s activities on a near-daily basis. It’s the breadth and complexity of the HR field that explains why many people fail to grasp what it is.
That wide-ranging nature of the field, however, is also what makes HR so vital to every business. To get on top of the HR at your firm, you need to understand the field better. The best way to get to know HR is to explore the primary responsibilities involved.
What Does HR Do?
The term ‘Human Resources’ reveals more about the field than first appears. The phrase relates to managing a firm’s workforce. That workforce is often the company’s most vital resource. HR also exists to support and provide for workers. It is a crucial resource for them in their day-to-day work. The field is well named.
The following are ten of the most common duties carried out by an HR pro or department. Together, they’re what help HR to both manage and support a company’s staff.
Manage Recruitment & Termination
Most people are familiar with this area of HR. The hiring and firing of team members are essential elements of any business’s existence. When a worker gets fired, HR must deal with terminating contracts and other paperwork. They may also need to oversee the return of equipment or revoke access rights to premises.
On the recruitment side, it’s HR’s responsibility to find the right candidates and get them on board. That involves defining the roles that must get filled and identifying criteria on which to judge applicants. It also means handling the interview process before liaising with other departments to make a decision.
At least some elements of onboarding also often get handled by HR. Contracts and other paperwork related to new hires must get completed and filed. Those new workers, too, need to get assimilated into their teams.
Handle Payroll & Compensation
All payroll and worker-related financials also get handled by HR. Exactly what this entails differs from one business to the next. Even at smaller, less complicated firms, however, it can comprise all the following:
- Tallying worker hours
- Paying salaries
- Calculating taxes
- Reimbursing expenses
- Managing and changing payment schedules
- Processing raises and bonuses
In a large company, this area of HR alone can provide full-time employment for a team of workers.
Set & Administer Employee Benefits
It’s not just salaries, expenses, and bonuses that fall under the remit of HR. Employee benefits are another thing for which the diverse department takes responsibility. That means deciding on the benefits to offer and handling their administration.
Offering employees the right benefits is vital. It can be the difference between a candidate choosing your firm or going elsewhere. Promising applicants often accept a lower paid job if it offers better benefits. Health insurance or dental, after all, could have far more actual impact on their finances.
When hiring, an HR pro might look at the benefits offered by other firms in your niche. That kind of analysis helps you to get a jump on your rivals. If you do offer benefits such as health insurance, there’s lots of admin and finance implications. HR pros need to get across these, too. They also must pay any bonuses, such as those that firms may offer to individuals who excel at sales and customer service.
Create Staffing Plans & Company Policies
If your business is continuously growing, you’ll need a staffing plan. That’s an exhaustive strategy for acquiring new talent as and when you need it. It’s HR’s responsibility to build and carry out such a plan. They must do so, too, in concert with other areas of the company.
A new inventory management system introduced by logistics could impact your staffing plan. HR must work with that department to tweak the hiring strategy. In the same way, HR also has to draft and update company policies continually. Those policies must stay relevant to the organization and its staff.
Foster Positive Relationships
Human resources isn’t all about paperwork and practicalities. It’s the department also responsible for the relationships in your organization. That’s both employee-employee interactions and the relationship between employees and the company.
Such relationship management can be critical to a business’s success. Positive interactions and proper treatment of employees foster a happy workforce. Happy workers are often more productive than those who are dissatisfied. What’s more, improper treatment of staff by a firm can rightly lead to legal or financial punishment.
Conduct Disciplinary Investigations & Actions
Things don’t always go smoothly at any business. There are problems within all workforces. When such issues occur, they must be handled professionally and appropriately. Complaints and reports of difficulties get taken to HR.
Human resources pros have to investigate any claims of wrongdoing. That might be a complaint from a worker about a colleague. It could equally be a report of poor treatment on the part of the company. It could be a request from the business to discipline an employee.
Disciplinary proceedings are a critical function of HR. It’s vital to an organization’s cohesion that complaints get managed in an even-handed way. Employees must feel safe and comfortable at work. At the same time, they must also get held to account for failing to meet company standards.
Monitor Employee Satisfaction & Provide Assistance
Aside from handling significant problems, HR is also concerned with general job satisfaction. The workforces of the most successful companies are happy and excited to get to work in the morning. It’s another duty of human resources to achieve that level of satisfaction at your firm.
There are a plethora of ways that HR pros can help boost employee satisfaction. Providing clear paths for career development is a prime example. Understanding that there’s room to grow in their role will make many workers much happier. Educational help or vocational training is something else that’s popular with workers. It gives people a greater sense of achievement and personal growth at work.
Design & Handle Training
Many workers need to get trained to fulfill their roles properly. New employees or staff in new roles must get taught their duties and the correct processes to follow. This training is yet another responsibility for the broad shoulders of HR professionals. In the case of new hire training, HR may need to design comprehensive courses. Existing staff members may also need to get drafted in to help with the sessions.
Promoting from within is an excellent policy for many businesses. If you do move an employee into a management position, they may need some extra training. HR can organize spots on external training courses or retreats. The department can also arrange cover for workers who miss work to attend.
Promote Health & Wellbeing
Your HR department is also responsible for your staff’s health and wellbeing. It’s an often unappreciated but critical aspect of human resources. Their role in this area includes making sure workplaces meet safety standards. It also encompasses helping employees who have health issues.
HR is where workers can go for help with severe or chronic conditions. That includes both physical and mental health complaints. Human resources will help employees manage their conditions. With the help of HR, staff can get the treatment they need and have the right support at work.
You might have noticed that we’ve mentioned paperwork a lot so far. There is plenty of documentation and paper trail related to HR activities. A final duty of the department at your firm is to keep and maintain all the records this generates.
Documents such as applications, payrolls, and benefits plans should get held by HR. These records help support their day-to-day activities. You may also need them to prove your firm complies with industry-specific regulations. Speaking of which, depending on your location, there are often some employment records that you’re legally required to keep.
When Might You Need to Focus More on HR?
If you didn’t before, you should now see how HR duties are critical to your business. Whatever your niche and however far developed your firm is, you must give HR the time and attention it needs.
For the smallest companies, owners or managers can take on the duties themselves. Many businesses, though, will need a dedicated HR professional or department. The following are four scenarios in which you may need to focus more on HR.
Your Firm’s Scaling
If you started a business from scratch, you might not have explicitly thought about HR in the early days. You will have taken on related tasks, but likely saw them as part of company operations. When you start scaling up your company and trying to achieve sustainable growth, HR has to get put front and center.
A dedicated human resources pro can help you get your hiring right. They’ll be able to identify your firm’s skill gaps and know how best to go about filling them. What’s more, HR can keep track of performance in your growing team. That’s something you’ll be less able to do yourself as your company expands.
Regulation or Legislation is Changing Rapidly
Law and regulation evolve apace. That’s particularly true of employment law and workplace legislation. Whatever your industry, you’ll have legal responsibilities to your staff. Failing to meet these expectations can lead to significant punishment.
When changes to regulations come into force, you don’t want your firm to get caught short. With all the other pulls on your time, keeping up with this legislation may fall through the cracks. A dedicated HR manager can take up the slack. It will be part of their job to track changes to employment law and keep your business compliant.
Staff Morale is Low
If your workforce is unhappy or unsettled, it could be because you haven’t given HR enough attention. Human resources, after all, is about supporting your staff as much as it’s about hiring and firing.
When you’re not on top of things HR-wise, there are often many more disruptions to daily activities. Discontent workers aren’t as productive and may enter into more disputes. The ultimate result of disharmonious workforces, too, is high employee turnover. That’s not something that any SME wants to face.
Current HR Structures are Overwhelmed
Even if you don’t have a dedicated HR manager or department, your firm still has HR duties. The chances are that you either handle them yourself or rely on another of your team members. That means human resource duties eat into the time they have for their other tasks.
As a business develops, HR duties and responsibilities multiply. Eventually, whoever is handling the tasks will start spending most of their time on them. It’s at this point that you need to hire a dedicated HR professional. It will boost productivity across the board and ensure that all HR gets dealt with correctly.
HR – The Most Important Part of Business that You’ve Never Fully Understood
Human resources is the best-known aspect of business that’s poorly understood. Everyone’s heard of HR, but few people have a genuine understanding of all that it entails. Now that you’ve read our guide, you can buck that trend.
Giving HR the attention it needs can be the difference between success and failure. Strong HR means you can build the best team, and keep them happy and engaged. It also ensures your firm won’t fall foul of regulations or legislation that could be crippling.
Nick Shaw is the Chief Revenue Officer (CRO) of Brightpearl and is responsible for Global Marketing, Sales and Alliances for the leading retail inventory management software provider. He has written for sites such as Hubspot and Sap.