Written by Sarah Reynolds
May 10, 2019
Businesses typically spend between 40 to 80 percent of gross revenue on employee salaries and benefits combined, depending on what sector the business is in. Because of this, it is critical that every organization treat their human resources (i.e., the personnel who work for a business or organization) as crucial assets.
HR professionals have a clear mandate: help companies get the best return possible from their human capital while controlling costs and minimizing risk. Humans can be unpredictable. Many employees don’t reach their full potential, and some can even have a negative impact on business operations. HR professionals must manage these risks, while ensuring that every employee is given the opportunity to succeed.
Why is your human resources department so important? They manage the day-to-day aspects of multiple functions within your organization, and they also set strategy around how you'll make the most of your human capital. Read on to learn more about the different responsibilities that make up the HR function.
HR professionals may be responsible for some or all of the functions described below, depending on their organization's size, complexity, and maturity.
The staffing function, sometimes called "recruiting" or "talent acquisition," focuses on forecasting the organization’s future HR needs, conducting workforce planning, recruiting an appropriate pool of candidates, and selecting the most qualified candidates for employment. Helping managers hire skilled employees that match the organization’s culture is one of the most important ways in which HR adds value to the organization.
The compensation function helps the organization set pay rates that are sufficient for attracting, recruiting, and motivating employees, while simultaneously controlling overall payroll costs. Advising managers on how to strategically spend limited compensation budgets is another important way in which HR adds value.
The benefits function helps to set and manage the total employee benefits package offered by the organization. Employee benefits include health benefits like medical insurance, retirement benefits like 401(k) plans, and security benefits, like disability insurance. A well-designed benefits package can act as a safety net that increases employee attendance and productivity. Benefits can also boost employee loyalty, improve retention, and reduce turnover costs. Like compensation, employee benefits need to be strategically managed, as they typically represent 30% or more of overall remuneration expenses.
The training, learning, and development function helps employees maximize their potential, grow in their current roles, and prepare for their next job within the organization. Training and development includes any employer-sponsored activity that enables an employee to enhance his or her job-related skills. Training is most often provided informally as on-the-job training or in classroom and computer-based training courses, but a creative organization can find different ways to develop promising employees. Development opportunities can include the chance to attend or present at an important conference, or a role on a team that is designing an exciting new product. Other activities covered in this category include tuition reimbursement, mentoring, and performance management.
The employee relations function focuses on the daily relationship between the employee and the organization. On a positive note, the employee relations function seeks to strengthen this relationship by encouraging open communication and fairness within the organization. Less pleasantly, this function is also responsible for handling disputes between management and employees, and disputes between the company and labor unions. The employee relations function may also be responsible for producing the employee handbook and enforcing workplace rules.
The above HR functions share a common purpose: to ensure that the organization has enough qualified, healthy, and engaged employees to accomplish its business mission safely and effectively. Diligent HR management maximizes the organization’s return on its human capital and provides a foundation for achieving overall organizational success.
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