Let's face it, there's a LOT that people teams are expected to handle when it comes to recruiting, managing, and retaining employees. Human Resources (HR) is a crucial function of any organization. It is responsible for managing an organization's most valuable asset – its employees. In this article, we explore the functions of HR, how these functions lead to better employee happiness, and the pros and cons of outsourcing and automating HR functions.
How many functional areas are there?
The core functional areas of HR can span 5-15 categories and involve much more than just writing job ads. From compliance to workplace safety, to diversity and inclusion, as well as analytics and culture surveys... Today's people teams are lucky if they even get a job description for their own roles, especially in new startups.
Do your company a favor and start with a list of areas of responsibility so that when you are inevitably faced with that curveball, you can handle it.
Go to File > Make a Copy and organize it. Set correct permissions, and modify to your liking.
To create a PDF, go to File > Download as PDF
What is HR responsible for?
Some of the core responsibilities of HR include:
Recruitment and onboarding: HR is responsible for attracting and hiring the best talent for an organization. This includes creating job postings, conducting interviews, and selecting the best candidates. Once a candidate is selected, the people team owns the onboarding and integrates them into the organization.
Employee relations: Maintaining positive employee relationships means managing conflicts, addressing employee grievances, and promoting a healthy and safe workplace culture.
Performance management: HR is responsible for designing and implementing performance management systems that help employees grow and develop within an organization. This includes conducting regular performance reviews and providing feedback and coaching to employees.
Compensation and benefits: Designing and administering compensation and benefits programs that attract and retain top talent is a huge challenge because payroll is typically an organization's highest cost. This includes determining salaries and benefits packages, managing payroll, and providing support to employees with questions or concerns.
Training and development: Preventing stagnation requires offering consistent training and development opportunities to employees. This includes identifying training needs, designing training programs, and delivering training to employees.
How do HR functions lead to better employee happiness?
HR functions play a crucial role in creating a positive and fulfilling work environment for employees. Here are some of the ways in which HR functions can lead to better employee happiness:
Employee engagement - By providing training and development opportunities, recognizing employee achievements, and creating a positive workplace culture, HR can help employees feel valued and engaged.
Work-life balance - Help employees achieve a healthy work-life balance by promoting flexible work arrangements and providing support for employees who are experiencing personal challenges.
Employee wellness - Promote employee wellness by providing access to healthcare benefits, mental health resources, and wellness programs.
Career development - Help employees achieve their career goals by providing training and development opportunities and creating clear career paths within the organization.
Conducting an audit against the HR responsibilities list
Use the free template to identify the HR responsibilities that are most critical to your organization's success.
Assess your organization's performance against each of these responsibilities. This can include reviewing policies and procedures, conducting employee surveys, and analyzing HR metrics.
Identify areas where your organization could improve its performance. Look for outliers, or macroeconomic shifts (a global pandemic, perhaps??) that can also impact these numbers.
Develop an action plan to address any areas of opportunity. This might include developing new policies or procedures, investing in new technologies, or providing specificity around goals and who is responsible.
Commonly outsourced HR functions
Many organizations choose to outsource certain HR functions to third-party providers to save on management and overhead. Here are some commonly outsourced HR functions and their pros and cons:
Payroll processing: Outsourcing payroll processing can save organizations time and reduce the risk of errors. If you can find a competitive provider, compare the cost of the monthly service fees with the cost of having someone in-house who can also do other work (like apply for tax benefits or research insurance options).
Recruitment: Outsourcing recruitment can help organizations access a larger pool of talent and reduce recruitment costs. It can also create a perceived lack of control over the hiring process and can be massively expensive. No one knows your company like you, so sometimes it can even result in a worse fit.
Benefits administration: Outsourcing benefits administration can save organizations time and reduce the risk of errors. However, it can also be expensive and can limit an organization's control over its benefits programs.
Training and development: Outsourcing manager training and development can help organizations access specialized expertise and reduce training costs. But be sure to verify that it aligns with your organizations needs, goals and culture.
What can be automated?
Many HR functions can also be automated using technologies such as HR information systems (HRIS) and applicant tracking systems (ATS). Here are some commonly automated HR functions and their pros and cons:
Onboarding - Automating onboarding can save time and reduce errors. However, it can also result in a lack of personalization and a less engaging onboarding experience for new employees.
Performance management - I don't recommend doing this, as it removes all of the context and personalization out of supporting your team. However, there are tools to help with collecting and storing 360 feedback that might save time and keep you organized (Example is PerformYard).
Recruitment - Automating recruitment can help organizations streamline the process and reduce recruitment costs. However, it can also result in a lack of personalization and a less engaging recruitment experience for candidates.
Time and attendance tracking - Automating time and attendance tracking can save time and reduce errors. However, it can also result in a lack of flexibility for employees and a lack of visibility for managers. Upwork automatic time trackers can make hiring a freelancer less daunting.
How is it different for international organizations?
HR functions can vary significantly for international organizations, depending on factors such as local labor laws, cultural differences, and language barriers. Here are some considerations for international organizations:
Local labor laws - Local labor laws vary significantly from country to country. This can impact functions such as recruitment, compensation, taxes, and benefits administration.
Cultural differences - International organizations must also consider cultural differences when managing HR functions such as employee relations and performance management. This can include differences in communication styles, work attitudes, and expectations.
Language barriers - International organizations must also consider language barriers when managing HR functions such as recruitment, onboarding, and training and development. This may require the use of translators or the development of multilingual materials. Make sure you add this to the core functional areas.
Here are some examples of organizations that have deep and specific HR functions:
Google - Google is known for its innovative HR practices, such as its focus on employee engagement, its use of data to drive HR decisions, and its emphasis on creating a positive workplace culture.
Zappos - Zappos is known for its unique approach to recruitment, which includes offering new hires a cash bonus to quit within their first few weeks if they don't feel that the organization is the right fit.
Patagonia - Patagonia is known for its commitment to sustainability and social responsibility, which is reflected in its HR practices, such as its generous benefits packages and its focus on work-life balance.
In conclusion, HR functions can lead to better employee happiness by promoting engagement, work-life balance, employee wellness, and career development. Outsourcing and automating HR functions can save organizations time and reduce errors, but can also limit an organization's control over its HR processes. International organizations must consider local labor laws, cultural differences, and language barriers when managing HR functions.
Successful HR practices can help organizations attract and retain top talent and create a positive and fulfilling work environment for employees, so it's worth knowing what they are – and could – be working on.