10 Key HR Functions That Keep Businesses Kicking

Ahuman resource specialist – regardless of company size, industry, type of culture, and policies – has to wear many hats. In a world where multi-tasking has become the norm, it’s no surprise that HR functions go way beyond hiring and firing.

Contrary to what most people would have you believe, effective human resource management isn’t something that anyone can pull off overnight.

It requires strong dedication, time management skills, a high level of emotional intelligence, and resilience, among other things, to do the job right (and well).

From meeting the staffing requirements of the company, to ensuring that every employee gets compensated well (and a whole lot of other things in between), it’s safe to say that HR plays a vital role in keeping any business afloat.

If you’re considering a career in human resources, have just started your professional journey, or are just curious about what the folks in the HR department do, keep reading.

In this in-depth article, we’ll touch upon the primary HR functions (or HR processes, if you will) that summarize the job.

The Complete List of Essential HR Functions

As discussed, a human resource department is a critical component of a business, consisting of a wide variety of functions.
Owing to the load, some organizations prefer hiring specialists for different functions, whereas others expect everyone to contribute towards everything.

Furthermore, each function comes with different activities or specific responsibilities that the HR professionals have to fulfill.

Let’s go through it all – one function at a time:

Human Resource Planning

It goes without saying that HR departments have one primary responsibility – to ensure a stable flow of talent in the company.

While staffing is the broader responsibility here (more on that later), in some organizations, planning ahead is necessary.

Considering that, the first HR function on the list is effective human resources/workforce planning – the core of talent management.

As the name suggests, HR planning refers to predicting or estimating the demand of talent/professionals for different departments.

For this purpose, human resources professionals rely on the power of forecasting, which they execute through employee surveys and by leveraging existing employment data, such as contract expirations, industry trends, etc.

The end-goal here is to minimize the risk of business roadblocks resulting from a shortage of talent in the company.

This includes keeping an eye on both permanent and contractual employees, as well as, succession planning – depending on the company.

Additionally, HR planning provides valuable insights about where the organization stands in terms of retaining its employees.

Naturally, a small business might not need its HR department to engage in full-blown human resource planning.
It all depends on the company size, industry, and geographical region(s).

Recruiting, Hiring, and Onboarding New Employees

The HR professionals have anticipated a shortage of personnel in the future. What now?

The very next step is to find, approach, and recruit talented profiles that could potentially meet the requirements mentioned in the job descriptions, and fill in the roles (known as “recruitment”).

Employee recruitment entails:

• Collecting/Accessing Candidate Information – most companies prefer building a database of potential candidates that they can access while recruiting. In any case, the very first step would be to scour through the CVs/resumes of candidates and filter out the best ones.
• Approaching and Assessing Candidates – the next step, obviously, is to approach said candidates/subject matter experts and invite them for an interview and other preliminary assessments.
• Selection – candidate(s) who make it through the assessments and are deemed fit for the role are then invited to join the organization.

While some companies might use the terminologies interchangeably, “recruitment” and “hiring” are two separate activities. The latter is concerned with merely filling up a role and not following a strategic approach.

That being said, depending on the business, some HR professionals also engage in hiring.

Once the job letter is signed and the candidate is all set to join the organization, the onboarding process begins.

Human resource specialists follow a comprehensive onboarding checklist. Additionally, they arrange new hire paperwork to ensure that new employees are engaged from day one and don’t face any challenges while adjusting to the new work environment or the organizational culture.

Compliance with Labor Laws

Moving on, another critical addition to the list of HR functions is to ensure that the business complies with labor (and employment) laws while managing its workforce.

This includes both federal and state-specific regulations.

A few significant federal labor laws include:

• Occupational Safety and Health Act (OSHA) – a regulation passed in the US, OSHA details the health and safety requirements of private sector employees. Under this regulation, certain employers are required to follow specific protocols to ensure safe working conditions.
• Employee Retirement Income Security Act (ERISA) – passed in 1974, ERISA is concerned with the income-tax associated with benefits-related transactions in private industries.
• Fair Labors Standard Act – this act includes rules on the federal minimum wage. Furthermore, it includes rulings regarding child labor (such as the maximum number of hours a minor can work legally). Some states have their own minimum wages and regulations concerning child labor.
• Family and Medical Leave Act (FMLA) – ensures that (certain) employers provide unpaid leaves to their employees for qualifying reasons.

To avoid any bumps and hiccups, legal compliance with the laws discussed above, and other regulations, is mandatory.

In addition to the above, employers also have to ensure i-9 form compliance and fill out tax withholding forms (read our guide to W-4 withholding forms to learn more).

Training and Development

Unstable industry trends, changing consumer preferences, and the struggle for competitive advantage has driven companies to invest heavily in employee training.

Developing, executing, and monitoring employee training programs is one of the core functions of HR departments.

From preparing new hires to take on their roles, to polishing the skillsets of existing personnel, training can include anything.

It may also include safety training or workshops regarding a new regulation.

Most modern businesses (even the small ones) use an online learning management system to administer their training programs.

Finally, HR professionals measure the effectiveness of the training programs with surveys and performance reviews (we’ll expand on that later).

Payroll Management

In a few organizations, payroll management is primarily the responsibility of the accounting department.

However, in most companies, the HR staff looks after this key function.

Payroll management, as the term indicates, is the record-keeping and proper distribution of the salaries of employees.

It also involves tracking the bonuses and deductions (if any), ensuring accurate compensation.

Some companies prefer doing payroll management manually, which includes paycheck calculations, deductions arising from benefits, etc.

On the other hand, some businesses invest in automated systems, such as GoCo, and go beyond Excel spreadsheets.

Making mistakes with the payroll can have some serious repercussions, so experts recommend opting for payroll software.

Benefits Administration

The next core human resources function on the list is the administration of benefits programs.

To attract and retain talented profiles, companies have to offer something more than just a paycheck.

In light of the shortage of talent, companies are investing heavily in increasing employee engagement and job satisfaction levels.

And a sure-fire way to do that is by offering competitive benefits packages.

The administration-bit falls on the HR teams, which includes:

• Creating/Updating benefits programs
• Educating new employees about the programs and onboarding them
• Keeping track of benefits-related deductions
• Compliance with certain laws

Like with payroll management, some employers prefer to use an automated system for benefits administration.

Looking After Employer-Employee Relations

“Employer-employee relations” is a separate component and specialization in HR management.

In organizations with unions, it’s up to the HR professionals to ensure that there’s no friction between the labor and the employers.

This involves:

• Consistently tracking the job satisfaction of employees
• Inviting employees to share their feedback about the management
• Bridging the communication gap between the top management and the labor
• Resolving conflicts using creative tactics and mediating disagreements

This is a major responsibility, as poor employer-labor relations can take their toll on the productivity, brand image, and ultimately, the very survival of a business.

Performance Management

To ensure that the human capital continues to meet the expectations, HR managers, usually in collaboration with supervisors, track the performance of individual employees.

As Dystopian or fictional as it may sound, the goal of performance management boils down to ensuring that your employees perform at optimal levels.

All of that entails:

• Having two-way feedback sessions between the employees and the departmental and HR managers
• Having managers do performance reviews (also known as appraisal reviews) or asking employees to conduct self-evaluations

Tracking employee performance can provide insights on room for improvement and drive some hard decision-making that ends with goodbyes.

Ensuring Health and Safety

While OSHA covers this HR function in private industries, ensuring the health and safety of employees is the top-most priority.

Besides federal and state regulations, some companies have additional protocols in place that double-down on health and safety.

This varies from company to company. However, it is up to the HR department to look after this area.

General Administration

Last, but not least, the general administration of the workplace in some companies also falls within the domain of human resources.

This could include a number of things, such as arranging office supplies, managing shifts, overseeing the day-to-day tasks that might not necessarily be directly linked to the core business, etc.

Ending Note

The HR functions discussed above pretty much cover everything that the job entails.

Remember – a good HR professional goes above-and-beyond to seek career development opportunities, and therefore, doesn’t rely on on-job experience alone to grow professionally.

If you’re a fellow HR, we recommend attending the top HR conferences, investing in courses, and pursuing a SHRM certification.