What Are the Essential HR Functions?

The HR department is responsible for many of the tasks that make a business run like a well-oiled machine. Finding the best people for each job and keeping them engaged, fostering a positive company culture, handing employment documentation — all of these HR responsibilities (and more) keep companies operational.

So what are the core functions of HR? At its foundation, HR is there to build positive relationships within the company and provide opportunities for each team member to succeed. The support (or lack thereof) that employees receive from HR has a notable impact on business metrics like employee retention. For example, the majority of workers who quit in 2021 — 63% of them — did so because they lacked advancement opportunities. Read on to learn more about human resources functions and how they impact employee retention.

The Ultimate Guide to Human Resources: 6 Essential Steps to Building a Strong HR Department

What Are HR Functions?

Unlike other departments that focus on the needs of clients and customers, HR focuses on the needs of the organization itself and its employees. The main goal of any HR department is to foster a positive relationship between employees and their employers, as well as ensuring your organization has the tools and talent to succeed. 

Some of the most well-known functions of human resource management include recruitment and hiring, performance management, and compensation. But they also handle things like health and safety, learning and development, and employee engagement. 

Through all of their varied responsibilities, HR professionals provide structure to the company and help promote a positive work environment with a strong workforce. Whether you are looking to improve performance and morale, or communication between the different levels of the company, human resource management is the place to start.

Top HR Functions

HR Planning

One of the most crucial — and often overlooked — functions of an HR department is planning for the future of the company. HR team members evaluate where the company currently stands and what needs to be done to meet its future objectives. As your HR department assesses the company’s plans, you create strategies to achieve those goals, which often are supported by a mix of the other crucial HR functions below.

Recruitment and Selection

One such tool to help your organization meet its goals is finding the right candidate for each position within the company. To do so, HR professionals advertise open positions, oversee recruitment, screen applicants, and facilitate negotiations between the company and potential new hires. The intent is to attract qualified candidates to work for the organization — and then keep them around. Retaining employees starts with onboarding, which includes explaining the benefits and company policies. 

Compensation and Benefits

Once they have hired the ideal candidate, the HR department oversees everything to do with employee compensation and benefits. This means calculating fair compensation rates for each position and providing benefits that attract great candidates. Of course, competitive pay is a major draw, but good benefits are equally important: 80% of U.S. workers are more interested in a position with benefits than a higher-paying role without benefits.

While the most common benefits are health insurance and retirement investment options like 401(k)s, there are many other options to include. Offering varied and attractive benefits can make all the difference in keeping your employees around for many years to come, as each employee is unique and will require different support. Some alternative benefits that you can offer include education assistance, wellness benefits like gym memberships, financial coaching programs, and flexible spending or health saving accounts.

Paid parental leave is not required in the U.S., so offering it is a great way to help your company stand out from the competition. And bonuses for sign-ons or referrals can accelerate your recruitment and hiring process.

Performance Management

So once you’ve enticed new employees with a great benefits package and competitive compensation, how do you maintain job performance? The performance management function of HR includes tracking the performance of employees and managers alike to ensure optimal engagement and productivity. This means using different assessment tools, coaching, and feedback to provide workers with the support they need to succeed. 

Performance management can take many forms, but the most important thing is to find a method that best suits your company and employees. Options HR professionals can utilize here include feedback surveys, performance reviews, or training assistance as needed. 

Learning and Development

Training for new hires on company policies and procedures is crucial, but it shouldn’t stop there. Did you know that one of the strongest influences on company culture is the availability of learning opportunities? Opportunities for employees to learn and develop new skills — as well as improve existing ones — benefit both the company and the employees. Individuals are more likely to engage in a company where they feel supported in their growth. You will also likely notice improvements in productivity and performance, as well as reduced turnover rates.

The great thing is that you can choose training programs and other learning opportunities that align with the goals (and legal responsibilities) of your company. Whether that means trainings on new and emerging technologies in your industry, market trends, or diversity in the workplace, you can find something that will benefit your employees and your organization. 

Career Planning

If you want to keep your top talent with the company, give them a sense of purpose and advancement opportunities. Career planning is an essential HR function as it serves to connect the employee’s ambitions with the goals of the organization. Helping staffers see how their growth can happen within the company is a great way to engage and retain employees. When your employees understand that the company is invested in their career planning, they are more fulfilled and productive. It also helps build a stronger employer brand and strengthens succession planning. 

Rewards

If you already offer competitive compensation, a robust benefits package, and growth opportunities, but want to further set your company apart, consider rolling out rewards. Rewards can come in many forms, from salary increases to recognition to more autonomy. Positive feedback is another great way to reward hard work and encourage higher performance. This can all help attract the best candidates while improving existing employee relations. 

Labor Law Compliance

One of the most critical HR functions is making sure that the organization complies with all relevant labor laws. This can help prevent any complaints, lawsuits, or other legal disputes from initiating or escalating, as many legal snafus can be traced back to issues with a hiring process, performance management, or employee discipline — all of which are overseen by HR. To stay compliant with all the laws and regulations, your HR department should perform regular compliance audits to keep policies up to date. 

Company Culture and Engagement

The company culture you foster plays a large role in employee engagement. HR professionals can host events and activities that offer plenty of opportunities for engagement and collaboration between departments. Another way to create a company culture that employees are interested in is by encouraging open communication between each level of the organization. Allow employees opportunities to discuss their concerns and actively listen to the feedback to ensure that your company is able to grow. With clear communication, your employees can unite around common goals and uphold the values that are most important to your organization.

Employee Participation and Communication

In addition to supporting an engaged company culture, open communication keeps employees up-to-date on business operations, such as changes to company policies or learning and career development opportunities. The HR department often oversees such communication between managers and employees so that each can be involved in relevant discussions and decisions. 

Health and Safety

Just like HR is responsible for keeping an organization compliant with relevant laws, they must implement and uphold health and safety regulations. The goal is to make these a part of the company culture so safety is ingrained in the mindset of each employee. In order to do so, HR professionals handle any safety training. If there are any injuries, they report them and handle any related compensation needs. 

Personal Wellbeing

Support on the job can make all the difference in employee performance, but don’t forget about problems outside of work. By helping employees when they encounter problems in their personal lives, HR can prevent the poor productivity and low engagement that results from external stress. So how can you do that? Make sure employees feel comfortable approaching HR to discuss any issues so that they can receive the necessary support. 

Administrative Responsibilities

All of those other HR functions we talked about? Yeah, they come with a lot of paperwork for HR to process. They store employee data, record personnel procedures, and oversee promotions, illness, discipline, and a host of other things. HR information systems can make this job a little easier, but there is still a lot to keep track of.

Function Evaluation

Somewhat paradoxically, another HR function is to actually evaluate all of the above functions to ensure they are serving the company as intended. By taking the time to examine what is working and what is not, HR departments can stay focused on the most critical areas of operation. 

Another style of function evaluation reviewing the level of specific roles within the organization. This means looking at job responsibilities and how each position functions within the company as a whole. This helps you assess if similar jobs receive comparable rewards — whether that comes in the form of compensation or other benefits like paid time off. 

Wellhub Supports Effective HR Functions

HR functions cover a wide range of topics: company culture, career planning, learning and development, and of course, compensation and benefits. Wellhub can help you support the health and wellbeing of your employees with unique benefit options — think gym memberships and apps with different health resources. 

Explore more about the functions of human resource management or talk to a Wellbeing Specialist today to get started.

References:

• Americans Favor Workplace Benefits 4 to 1 over Extra Salary: AICPA Survey. (November 28 2018). AICPA. Retrieved December 17, 2022 from https://www.aicpa.org/news/article/americans-favor-workplace-benefits-4-to-1-over-extra-salary-aicpa-survey.
• Employee Well-Being Report. (May 2021). Glint. Retrieved December 17, 2022 from https://www.glintinc.com/wp-content/uploads/2021/05/Glint-May-2021-Employee-Well-Being-Report.pdf.
• Exploring 7 Key Functions of Human Resources. (December 8. 2021). University of Massachusetts Global. Retrieved December 17, 2022 from https://www.umassglobal.edu/news-and-events/blog/key-functions-of-human-resources.
• Parker, Kim. Horowitz, Juliana Menasce. (March 9, 2022). Majority of workers who quit a job in 2021 cite low pay, no opportunities for advancement, feeling disrespected. Pew Research Center. Retrieved December 17, 2022 from https://www.pewresearch.org/fact-tank/2022/03/09/majority-of-workers-who-quit-a-job-in-2021-cite-low-pay-no-opportunities-for-advancement-feeling-disrespected/.
• The 12 Key Functions of Human Resources. (February 22, 2021). Indeed. Retrieved December 17, 2022 from https://www.indeed.com/career-advice/career-development/human-resource-function.
• Tikait, Payal. (November 21, 2022). 10 Key Core HR Functions. SelectHub. Retrieved December 17, 2022 from https://www.selecthub.com/hris/hr-functions/.
• Vulpen, Erik van. (November 3, 2019). The 12 Key Functions of Human Resources. Academy to Innovate HR. Retrieved December 17, 2022 from https://www.aihr.com/blog/human-resources-functions/.