What Is an HR Department?

The term human resources (HR) refers to the department responsible for managing employee-related resources. It’s an essential partner in an organization’s success. A better understanding of the structure of a human resources department can help you create or reorganize your HR department.
 
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What is an HR department?

One of the functions of an HR department is to recruit and guide employees. It also strategically manages the culture and work environment of a company.
 

Human resources management (HRM) considers employees the company’s most valuable asset. Therefore, it sets up and supervises various actions to develop the human capital and talent of a company. A department of HR takes care of employee motivation and wellness, compensation, benefits, recruitment, organizational development, safety, employee relations and training. HR plays a strategic role in business management and the implementation of workplace culture. If effective, it can contribute significantly to the company’s overall success.
 

A human resources department manages more than administrative tasks. It implements the strategic use of employees and the development of programs that will impact the business in positive ways.
 

Definitions and examples of departments in human resources

The internal structure of HR can be defined with units or departments corresponding to its main functions:
 

  • Administration
  • Recruiting and staffing
  • Health and safety
  • Training and development
  • Compensation and benefits
  • Labor and employee relations
  • Disciplinary actions
  • New hire onboarding
  • Company policies
  • Diversity & inclusion

Administration 

The role of HR administration is wide because it’s all about developing and managing the workforce. Administrators handle compensation, staff training, corporate policy compliance and much more. Each specialty requires a different set of skills to fulfill the necessary duties.
 

Recruiting and staffing 

Human resources departments manage recruiting and staffing. They make sure the company has enough employees to run the business, and they develop and implement recruiting procedures to ensure they hire the right people. HR personnel often create job descriptions, advertise jobs and conduct interviews and background checks. Their objective is to find people who have the necessary skills to complete the job and who also add to the company’s culture.
 
This function is crucial because hiring the right team members contributes to better operational efficiency and lower turnover. The recruiting and staffing department manages onboarding, welcomes new employees and provides them with all the necessary tools or information.
 

Related: New Hire Onboarding Checklist
 

Health and safety

HR considers the health and safety of employees a priority. This department researches and develops health and safety procedures in compliance with laws and regulations. The department can offer health and safety training to employees or recommend appropriate clothing and equipment.
 

Training and development

The HR training unit develops a continuous training program for the company’s employees to ensure their education and skills are current. Whether it’s offering a course on new technologies or facilitating leadership training for supervisors, the training and development department provides access to materials for all employees. It coordinates with the compensation and benefits unit to reimburse the costs of external training that employees sometimes pay. HR training and development managers also organize the new hire orientation by introducing new employees to their colleagues and offering mentoring.
 

Compensation and benefits

This unit manages payroll, payroll tax administration and benefits administration. A good compensation and benefits package can make the difference when a company tries to hire the right candidate. They organize wages, insurance, holidays and other perks for employees. Human resources personnel aim to meet employees’ needs while maintaining fairness and consistency in the organization. With this objective, the compensation and benefits department explores, proposes and manages new benefit options for employees.
 

Labor and employee relations

Employees can turn to the labor and employee relations department when they have concerns, and the HR department will take necessary actions. For example, if an employee has issues communicating with management or a conflict with another employee, HR will mediate the situation and find solutions.
 

Disciplinary actions

In the case of employee misconduct, HR must take certain actions to correct or reprimand the undesirable behavior or performance. The solutions can include a verbal or written warning, probation, suspension or termination. Each instance is judged on a case-by-case basis, and the severity of the infraction dictates the administrative response.
 

Read more: Employee Disciplinary Action: Effective Tactics to Try

 

New hire onboarding

Onboarding is the process of introducing and socializing a newly hired employee and can be broken into two categories. Formal onboarding is the process of taking the employee through the orientation and training processes. Informal onboarding involves helping them adjust to the environment and the expectations and requirements of their position. New hire onboarding can include assigning badges, equipment and mentors.
 

Company policies

HR policies are about ensuring that all employees are respected and that proper benefits are available. HR staff update and change company policies and employee handbooks as needed, and they make sure employees are made aware of all company policies.
 

Diversity & inclusion

HR departments work to help create and empower a diverse and inclusive workplace culture by monitoring diversity data and trends (in both the current workforce and hiring practices) and developing diversity program initiatives that encourage workers to respect and embrace differences in the workplace.
 

Two approaches to personnel departments

Although similar, some differences between a personnel department and a human resources department exist.
 

Personnel department

A personnel department is an administrative function in an organization that hires staff and manages personnel relationships at a low level.
 

Here is how it approaches different areas of employment:  
 

  • Hiring: They check boxes and match resumes.
  • New employee orientation: They fill out paperwork, hand out the handbook and show the workplace.
  • Compensation and benefits: The personnel department creates strict pay grade rules, maintains wage consistency and limits salary increases.

Human resources management

Human resources management ensures a company has the necessary human capital and the right people with the right skills to be productive and accomplish its objective.
 

Here is how it approaches different areas of employment:  
 

  • Hiring: Must be done by specialists to ensure great hires that will fit in the company culture and have the required skills
  • New employee orientation: This includes filling out paperwork and preparing new hires for success by introducing them to coworkers and helping them feel welcome. 
  • Compensation and benefits: Fairness and consistency are crucial, and the organization must answer its employees’ needs. If some of the staff have specialized skills and require more benefits to stay involved in their positions, HR provides them. It’s in the best interest of the business to have satisfied employees working for the company.

Related: How to Hire Employees: A Step-by-Step Guide
 

In-house HR vs outsourced HR

As the department that’s responsible for staffing and training employees, HR plays a strategic role in helping companies navigate their ever-changing landscapes. Having an in-house department or deciding to outsource this functionality depends on numerous factors, including organization size.
 

Businesses that choose to outsource their HR department save money and time as they forgo providing yearly salaries to pay a smaller team a few times a year for desired services they need at the time. They don’t need to purchase and implement an HRIS system, which can be challenging. However, outsourcing is less personal, as it may be hard for outsourced HR staff to feel like part of the team, and employees may resent someone from the outside telling them what to do.
 

While maintaining an in-house HR department can be a significant investment, it makes HR tasks feel more personal, which can be beneficial. An in-house department can more easily assist with company growth and help businesses remain compliant with local, state and federal laws.
 

Ultimately, the choice to have an internal or outsourced HR department is a decision for senior executives to make. 
 

Human resources department frequently asked questions

Here are some answers to common questions about human resources: 
 

What are human resources processes?

Common human resources processes include:
 

  • Human resource planning 
  • Employee remuneration and benefits administration
  • Performance management
  • Employee relations

What are the core competencies of human resources?

Core competencies of HR include:
 

  • Communication: Human resources departments facilitate communication between employees and supervisors. They also manage conflict resolution.
  • Business understanding: HR teams must have some business insight to understand how HR policies contribute to the organization’s objectives and to build strategies to support these goals.
  • Ethics: HR needs to build trust within the organization to be effective.
  • Human resource knowledge: The human resources team must be knowledgeable about human resources’ importance and strategies. It must also commit to continuous learning to stay updated.

How many employees require an HR department?

While there is no legal requirement to have an HR department, some choose to look at the number of employees a company has as an indicator. By the time full-time staff reaches about 40 to 50 people, it’s time to consider employing a dedicated and experienced HR professional. 
 

What are the positions in an HR department?

There are numerous positions within the HR department, but there are five core functions:
 

  1. Staffing personnel deal with identifying and recruiting talent.
  2. Development HR representatives onboard new hires and provide training resources.
  3. The compensation unit sets salary and benefit levels that match the market.
  4. Safety and health directors ensure government health and safety requirements are met.
  5. Employee and labor relations defends employee rights and mediates disagreements.
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