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The idea sounds simple: ensure the business has the right people, in the right place, at the right time, motivated, and able to do what the business needs at that moment.
In practice, HR is more complicated — and more important.
Human resource management (HRM) handles the staffing and well-being of a company and its employees. The role and responsibilities of a human resources manager are far-reaching. They manage various processes, including employee health and wellness, hiring and firing, and employee benefits.
Depending on the company's size, the human resources department can be one individual or a whole team. However, regardless of its size, the HR department is crucial to a healthy, functioning organization.
Let’s unpack what exactly human resource management is and what makes a successful HR department.
What is human resources?
Human Resources is the business department responsible for all employee-related matters.
Such matters include:
- Hiring and firing
- Involvement in performance-related discussions
- Employee compensation and benefits
- Onboarding and training
- Labor and employee relations
Given the extent of their responsibilities, human resources is essential to organizations. This is particularly true when recruiting new staff, managing human capital, and keeping up to date with legal requirements.
In addition to traditional HR functions as listed above, effective human resource departments also add value to a company by:
- Boosting innovation, flexibility, and creativity in the workplace
- Developing key competencies in both employees and across an organization
- Effectively tying compensation to performance and individual skillsets
- Managing employees more effectively
- Growing team leaders' management skills
- Incorporating new workflows and processes and managing the integration of new tools
Fostering employee well-being, social connection, growth, and agility across remote and diverse workforces.
What is human resource management (HRM)?
Every great department needs capable leadership, and human resources is no exception.
Human resource management is the strategic approach to managing people, getting the most out of your employees, and improving company culture.
What are the roles of a human resource manager?
The human resource manager brings the tools and expertise to form a comprehensive approach to talent management. This means that they bring specific tactics to recruitment, onboarding, performance management, safety, and employee benefits.
7 Key areas of human resource management
Successful human resource management calls for several competencies and skills. For human resource professionals to remain agile and efficient, they should focus on all seven primary areas of HRM:
- Recruitment and selection
- Performance management
- Learning and development
- Leadership development and succession planning
- Compensation and benefits
- HR information systems
- HR data and analytics
Let's take a closer look at these seven areas and human resource management's role in each.
1. Recruitment and selection
HR professionals are most often recognized for their hand in recruitment, but it's not the only aspect of the job.
When a new job position opens up, human resource departments have a lot to do. They touch each area of recruiting, end-to-end. This includes creating job descriptions, advertising, interviewing, creating job offers, and negotiating salaries.
This process may involve several stages of interviews and include using HR tools like preselection tools. Progressive HR professionals use different tools to reach more diverse talent pools and reduce bias in the hiring process. This is key to keeping fresh skills and perspectives coming into the company.
2. Performance management
Performance management is an area of people management that measures people against their role requirements and KPIs. Measurement includes structured performance reviews, feedback on performance, and identifying areas for improvement.
The term is also often used to describe managing poor employee performance. In these instances, HR works with individuals to lift their performance to a satisfactory standard.
However, strong performance management should be in place for all employees, not just poor performers.
The current trend in HR management is toward continuous performance development and coaching. In fact, many major companies have dropped the traditional performance review completely.
3. Learning and development
A key to a successful human resources department is ongoing employee learning and development.
Professional development opportunities benefit both employees and organizations by keeping teams relevant. They can also increase retention as employees learn new skills, rise through the organization or make lateral moves.
Also, technology and the business environment change so fast now that companies often need employees to cover new tasks or roles. HR has to ensure that employees have access and support to learn whatever they need when they need it. That usually means some on-the-job training (OJT) with peer-coaching or shadowing.
4. Leadership development and succession planning
Equipping a business with the skills and capabilities it needs to function optimally is at the core of human resource management. That includes having leaders, and the right types of leaders, throughout the organization.
This means that preparing for a leader's departure or having a succession plan is crucial for an organization.
It's especially crucial concerning senior leadership. Even companies with the best retention plans experience turnover. It's a significant challenge, especially when you consider it costs nearly $20,000 to replace someone, often far more for a leader.
When succession planning, HR should have a strategic plan if someone leaves and know who can replace them.
Leadership development is a unique area of HR that keeps a pipeline of leaders moving through the organization and levels-up current leaders.
5. Compensation and benefits
Fair, performance-based compensation is key to motivating and retaining employees. So, it's another crucial part of human resource management.
This involves pay negotiations, evaluating commission plans, and creating and defining employee benefits. Such benefits often include:
- Healthcare (including dental, vision, alternative, etc.)
- Company cars
- Phones and laptops
- Holiday and sick leave entitlements
- Pension plans
In addition, employee wellness, mental health, and well-being have become a top concern for companies everywhere. Employees and potential employees don't just want a few wellness perks or an EAP program for clinical mental health coverage. They expect companies to offer benefits that genuinely support them in their wellness and mental health.
6. HR information systems
HRM information systems (AKA the HRIS) support all aspects of the human resources department.
For example, a Learning Management System (LMS) helps with learning and development. Applicant Tracking Systems (ATS), for instance, assist with recruitment, and so on.
Other such systems include payroll and performance management systems.
7. HR data and analytics
Human resource managers can also leverage data from their information systems.
By employing HR analytics or initiatives, a human resource manager can analyze company trends, among other things.
With a large portion of the workforce working remotely, HR managers now use people analytics tools that reduce costs and enable better management decisions. However, this needs to remain balanced with issues of privacy, trust, and concerns around micromanagement.
Human resource management as a career
If you're passionate about human resource development and looking to be an HR leader, there are a few things to consider.
There are a few different pathways into HR management with different qualification requirements.
So, let's take a look at three considerations to make when choosing a human resources career path.
The first place to start when considering a career in human resources is education. What level of education are you interested in undertaking?
At an undergraduate level (bachelor's degree), it is recommended that HR candidates take a range of classes across disciplines, including:
- Behavioral sciences
- Liberal arts
- Social sciences
Other areas for further study that are desirable for those looking to work in human resource management include:
- Development of oral and written communication skills
- Business and economics
- Labor relations and labor law
- Organizational development and behavior
Do you need a Human Resources degree to be an HR manager?
Though it is not always necessary to have a bachelor's degree in human resources, a master's degree could give you an advantage.
That said, many human resources manager roles require at least one year's work experience in a similar position. So getting your foot in the door with an internship could be an excellent way to start, regardless of your undergraduate focus. In time, you might progress into an entry-level role before building your way into a management position.
Transitioning to HR
Not all HR professionals begin their careers in human resources roles.
It's not uncommon for employees to transition into HR positions once they better understand what the department does for a company.
If you're considering transitioning into the HR field, we recommend the following:
- Discuss this desire with your HR rep or manager
- Consider undertaking further study, such as an HR management degree.
- Find out if your employer can assist with costs towards education.
- Volunteer to assist with HR duties to gain experience
- Find HR communities online to learn from and network with
HR generalist vs. HR specialist
There are two main kinds of HR employees: the Generalist and the Specialist.
HR generalists are responsible for a broad range of activities, including:
- Company staffing
- Training and development
- Managing a diverse workplace
- Overseeing the compensation program
- Administering employee benefits
- Developing HR policies and processes
- Ensuring such policies are adhered to
- Future-proofing and ensuring upcoming HR needs can be met.
Entry-level HR Generalist positions tend to be titled assistant or administrator, with mid and upper-level role examples including:
- HR Generalist
- HR Department manager
- Chief HR officer
- HR Business Partner
- People Services Manager
On the other hand, the HR Specialist has a more specific technical knowledge in a given area of HR.
Such roles tend to be more common in larger workplaces, which need specific experience and expertise to meet the organization's diverse needs.
Summarizing human resource management
Human resources management is the strategic approach to managing and supporting people in the workplace, including hiring, onboarding, training, and employee relationship management.
It's a vital part of modern businesses and the people-powered future that relies on realizing more of the potential of people to perform successfully.
Are you interested in taking talent development to the next level? Learn how we can help.