Written by Chris Russell
4th June, 2021
The 5 Core Human Resources Functions
Every business with more than just a few dozen employees has a human resources department. It may be only one person who handles all the human resources functions. Or, as in the largest organizations, there may be hundreds of professionals who specialize in just one functional area.
So broad is the reach of these human resources functions they touch every single employee across every department on a daily basis.
Depending on the organization, its industry and size, there may be five, six, seven or more separate human resources functions. For our purposes, we’ll look at the five core areas: recruiting and staffing, compensation and benefits, training and development, talent management, safety and compliance.
In large organizations, these functions may be split. So where “safety” may not be a core human resources function for say, an accounting firm, blue collar organizations and those in healthcare and similar fields are more likely to have safety and compliance as separate human resources functions.
However they’re described, all HR departments share the same basic HR functions. Here’s a brief look at each of the core human resources functions.
Compensation and Benefits
Often described as “total rewards,” this HR function involves analyzing and setting pay ranges for each job in an organization and determining the benefits the business offers. Larger employers will conduct compensation surveys to keep pace with the market and set pay ranges consistent with each job description to ensure the company can attract and retain talented workers. At smaller companies, HR may be tasked with assisting in managing payroll.
A benefits coordinator – or more than one – will manage and negotiate benefits for the company. Employers with large workforces have specialists who will negotiate group health insurance rates and coordinate with outside administrators managing the 401(k) and other financial programs.
Smaller companies may outsource benefits management, though an HR practitioner will always be involved in this HR function in order to assist employees and stay abreast of market developments.
Recruiting and Staffing
In today’s highly competitive business environment, where every organization is eager to hire the most talented people, recruiting has become a strategic imperative. It’s not enough simply to fill job openings. This human resources function is involved in sourcing talent, marketing the company to candidates and smoothing their entry into the company and its culture, a process called onboarding.
To do that, recruiters work directly with hiring managers to craft and post job descriptions. They review resumes, screen candidates and make interview recommendations to the manager. They may also interview the candidate and coordinate the hiring with the manager who makes the final selection.
In the largest organizations, this HR function is divided among different specialists, including sourcers who focus exclusively on identifying the best candidates, often for the most challenging to fill positions. A growing number of companies have recruitment marketers whose job is to promote the employer brand and gather and analyze candidate views and sentiment.
Safety and Compliance
As we noted earlier, in many companies, these are separate HR functions. Organizations in highly regulated businesses – mining or trucking for example – and certainly those with a global presence are the ones most likely to have HR professionals specializing in each area. Companies not in hazardous or regulated industries typically see this as a single function.
Safety professionals may not be a part of HR, but there will be a practitioner in the department – or more than one – working with them to provide required safety training and to monitor the licenses employees must have to do their job. Compliance with industry and government safety standards and rules, preparing reports and maintaining records of incidents and inspections are also key parts of this human resources function.
Outside the specific area of safety, all organizations have to comply with a myriad of government laws and requirements. Even the smallest businesses are required to collect and keep a variety of records for the IRS, Homeland Security, OSHA, the EEOC and other agencies both federal and state; in some cases, for their local municipality.
Neglecting this human resources function can be costly. There are civil and even criminal penalties for failing to comply with the government rules.
Training and Development
This HR function may be as basic as training a new worker on the company’s practices and procedures. At larger companies, this function entails developing and managing an on-going training and career development program tailored to each employee.
With change rapid and ongoing, companies know their success depends on training employees on new tools and for new jobs so they are ready to step in when needed. That makes succession planning a critical part of this HR function, which is also part of overall talent management.
Training today, however, goes beyond the technical skills. Managers, team leaders and those in managerial career paths are being trained on the so-called soft skills of communication, team work, time management and others. Companies have discovered that it’s far more important for a manager to be a good listener and coach than to have the best technical skills.
What is still sometimes called employee relations, talent management is a human resources function that has broadened well beyond the traditional boundaries of enforcing adherence to company policies and procedures, the “HR police” role.
While HR is still the arbiter of employee behavior, the modern version of the function is far more involved with developing and enhancing the relationship between employer and employee. Practitioners focus on employee performance, job satisfaction, engagement, company culture, workforce planning and extending into productivity and employee motivation.
With that kind of assignment, talent management necessarily cuts across all other HR functions. The goal is to increase performance, giving the company a competitive advantage by creating an integrated process that leverages the full range of HR functions.
Many practitioners consider talent management to be the overarching human resources function, setting the strategy that guides each of the other HR functions.
HR Function Crossover
We’ve described some of these five broad HR functions as though they were separate and distinct areas. In reality, even in the largest organizations, what happens in one functional area affects the others. A pay scale that is not competitive makes it difficult to recruit the best people, which in turn means hiring less skilled workers who require more training and may simply not meet talent management’s performance goals.
That’s why coordination among the multiple human resources functions is so critical. And why so many business leaders have come to recognize the importance of human resources to the success of their organization.
### Contributions by John Zappe ###