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What’s the Difference Between HR and Personnel Departments?

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Human resources (HR) refers to the department responsible for managing employee-related resources and personnel relationships at a high level. A personnel department, by contrast, is an administrative function in an organization that hires staff and manages personnel relationships at a low level.

Both departments are essential partners in an organization’s success. A better understanding of the structure of a human resources or personnel department can help you create or reorganize your company’s own departments.

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What is an HR department?

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

Human resources management (HRM) focuses on employees because they consider them to be the company’s most valuable asset. To this end, HR sets up and supervises various actions meant to develop a company’s human capital and talent. This crucial department also strategically implements ways to use and develop human capital.

Some things HR takes care of include:

  • Employee motivation and wellness
  • Compensation
  • Benefits
  • Recruitment
  • Organizational development
  • Safety
  • Employee relations
  • Training

Definitions and examples of departments in human resources

The internal structure of HR can be defined with units or departments corresponding to its primary functions, which are described in more detail below.

Administration

HR administration’s roles are broad because it’s charged with 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

In recruiting and staffing, HR ensures the company has enough of the right employees to run the business. HR personnel often create job descriptions, advertise jobs, conduct interviews and run background checks. They also manage onboarding, welcome new employees and provide them with the necessary tools or information.

The recruitment and staffing department aims to find people with the necessary skills to complete the job and add to the company’s culture.

Health and safety

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 offering training on a new technology or facilitating leadership training for supervisors, the training and development department provides access to materials for all employees.

Training and development coordinate with the compensation and benefits unit to reimburse the costs of external training that employees sometimes pay for. 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. 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 employee benefits options.

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, HR would mediate for an employee having communication issues with management or conflicts with another employee. HR may also suggest solutions on how the issues can be prevented moving forward.

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.

New hire onboarding

Onboarding is the process of introducing and socializing a newly hired employee and can be broken into two categories—formal and informal onboarding.

Formal onboarding involves taking the employee through the orientation and training processes. This can include assigning badges, equipment and passwords to relevant company systems.

Informal onboarding involves helping the employee adjust to their new environment and understand the expectations and requirements of their position. This may include assigning a mentor for the employee’s first few days or weeks on the job.

Company policies

HR policies ensure that all employees are respected and that proper benefits are available. HR staff update and change company policies and employee handbooks as needed and ensure employees know 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. They’re also responsible for developing diversity program initiatives that encourage workers to respect and embrace differences in the workplace.

In-house HR vs. outsourced HR

As the department responsible for staffing and training employees, HR plays a strategic role in helping companies navigate their ever-changing landscapes. Choosing an in-house department or outsourcing depends on numerous factors, including organization size.

Outsourcing the HR department can save money and time as you forgo providing yearly salaries to full-time team members and instead pay a smaller team a few times a year for desired services. You also 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. An in-house department can more easily assist with company growth and help businesses comply with local, state and federal laws.

Ultimately, choosing an internal or outsourced HR department is a decision for senior executives.

What’s a personnel department?

A personnel department is an administrative function in an organization that hires staff and manages personnel relationships at a low level. Personnel departments may be responsible for hiring, new employee orientation, compensation and benefits.

What’s the difference between HR and personnel departments?

Some of the functions of a personnel department overlap with that of HR, but their approaches differ. For example:

  • Hiring: Personnel departments check boxes and match resumes. HR departments ensure hires have the required skills and fit or add to the company culture.
  • New employee orientation: Personnel departments fill out paperwork, hand out the handbook and show the workplace. HR departments fill out paperwork, too, but they also prepare new hires for success by introducing them to coworkers and helping them feel welcome.
  • Compensation and benefits: The personnel department creates strict pay grade rules, maintains wage consistency and limits salary increases. HR departments organize compensation and benefits to fit employees’ needs.

Although some of their functions are the same, HR and personnel departments differ in their approaches. While HR focuses on the people side of operations, personnel departments tend to be more administrative and less personal.

Frequently asked questions about human resources departments

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 that 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 effective HR strategies. It must also commit to continuous learning to stay updated.

At what size does a company 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.

Does my company need an HR or personnel department?

Choosing an HR department or personnel department is a personal one. If your company is large enough, you don’t have to choose. Some larger companies have both so that human resources can focus more on the people while the personnel department focuses more on administration and statistics.

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