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Defining Human Resources (HR) Functions in Business

Departments vary from industry to industry and company to company, but nearly every business has a human resources (HR) department. HR provides vital administrative support to companies of all sizes, in every industry and every workplace. Learn about the key functions of the human resources department and the benefits a strong HR team can provide your company.

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What is the human resources function in business?

Human resources manages the people in your company. HR meets employee needs in a variety of administrative areas, offering support and guidance on things like career development, conflict resolution and job performance. Since HR handles the bulk of a company’s administrative duties, other employees can focus on completing their specific job duties and responsibilities.

Related:Outsourcing Human Resources: Things to Consider

Benefits of human resources in business

Human resources departments offer many benefits to businesses by providing internal structure and support to employees, such as:

  • HR lowers turnover rates by offering counseling and other resources to struggling employees.
  • HR helps resolve interpersonal conflicts in the workplace.
  • HR boosts morale by establishing a positive company culture and providing employees with incentives.
  • HR improves work output by handling administrative tasks for other employees.
  • HR develops promising employees through professional development and performance monitoring.
  • HR creates and implements training to improve work performance and company culture.

Key human resources responsibilities

Human resources departments handle a broad range of duties and responsibilities, including:

Labor law compliance

Human resources representatives receive training in labor law compliance and are capable of handling the necessarypaperwork and establishing appropriate work conditions related to labor laws.

Recruitment and training

Posting job openings, interviewing candidates and providing job training are vital aspects of the human resources department’s responsibilities. HR representatives might consult with members of other departments when handling recruitment or training.

Tax compliance

Some tax-related information must be retained for a specific period of time in case documentation is required by a government agency. The HR department manages the appropriate storage of this information.

Record keeping

The HR department often houses and maintains records like personnel files, payroll information, insurance policies and other important business-related documentation.

Company relationships

HR representatives ensure that employees at all levels of the company know who they can speak to for different professional needs like requesting time off, arranging a performance review meeting or addressing an issue with payroll.

Performance monitoring

HR often oversees employee job performance for purposes of developing appropriate training or career advancement plans for departments or individual employees.

HR planning

HR planning is the process of designing a workforce for the business that will benefit the company in the future. For example, HR may suggest hiring more employees to meet increased production needs or updating an employee’s title to better reflect the work they’re performing.


HR usually manages new employee onboarding, including any workplace training, providing handbooks and collecting paperwork.

Professional development

Some HR departments offer professional development opportunities to employees through attendance at industry conferences or continuing education off-site.

Career guidance

HR departments offer career guidance and support to employees. An HR representative might help an entry-level employee establish short-term and long-term goals for developing their skills and promoting within the company.


HR can boost morale and motivate employees through the use of incentive programs that give tangible rewards like gift cards or other presents to employees or through team-building events like off-site meals or activities.

Job titles and duties

HR may be responsible for assessing and updating job titles and duties periodically as responsibilities grow and change.

Union relationships

Some HR departments need to foster relationships with unions if the company’s employees are union members. This ensures HR is meeting the union requirements as well as complying with other legal requirements.

Employee advocacy

HR can help employees advocate for themselves in situations of conflict. HR representatives can mediate disagreements or offer support and guidance to employees who feel they are wronged by a colleague in some manner.

Health and safety

HR ensures that the workplace is a safe and comfortable space for all employees. They address any concerns employees might voice regarding their personal health and safety.

Company culture

HR is a key department in fostering positive company culture. They help create an open-minded and fun workplace with supports for career development and improvement.

Human resources FAQs

Many company leaders have questions about the functions of the human resources department. Here are answers to some of the most frequently asked questions about HR:

What qualities make an effective HR department or representative?

Human resources representatives rely on both hard and soft skills to perform their jobs well. Some of those skills include:

  • Knowledge: HR must understand legal compliance, tax law and other specific information.
  • Communication: Understanding others and being understood are both vital skills for HR representatives.
  • Time management: HR representatives handle a variety of tasks on the job. They must be able to manage their time effectively to meet all their responsibilities.
  • Professional demeanor: HR manages sensitive information and must handle that information with professionalism.
  • Impartiality: In disputes or conflicts, HR representatives need to remain impartial and do their best to support all parties involved.
  • Devotion: HR representatives should be devoted to the company and employees they serve, working every day to improve the culture and workplace.

Should my company’s HR representatives earn a certification?

HR representatives can earn a variety of certifications in their field. Some are broad, like Professional in Human Resources (PHR), while others focus on a specific area of human resources, like the Certified Professional in Learning and Performance (CPLP). These certifications often require training and testing on specific HR skills, so encouraging your employees to earn a certificate would boost their knowledge in their field.

When should HR be an internal department, and when should it be outsourced?

Some companies maintain a fully internal HR department, while others outsource some or all of their human resources responsibilities to HR outsourcing companies. Businesses looking to save money on personnel might consider outsourcing their HR departments.

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