It's more crucial than ever for a company to treat its people well — and the HR department is in charge of that mission. Your HR department works with future and current employees, their salaries, their vacation time, payroll and even inner-office drama. Basically, HR does a lot. Seven major things, to be exact.

No matter the size of your company, HR is usually in the trenches with the employees, making sure things run smoothly. That being said, there are seven major functions of HR that are vital to not just the department, but also the entire company. Let's delve deeper into the functions of HR and how each impacts an organization. [1]

Strategic management

HR professionals are proactive in planning for the future by way of meeting the continuous short-term and long-term objectives, otherwise known as strategic human resources management. The aim of strategic HR management is to improve business performance. Having a plan prepares the HR department to execute both a business strategy and goals [2]. This can be done by adopting a strategic approach in meeting the company’s long-term plans.

Assessment of your current employees

Strategic HR planning begins with the assessment of the company’s current employees’ knowledge, skills and abilities, including their strengths, education levels and additional training or certifications. An interactive organizational chart helps in keeping track of the employees’ strengths and talents easier. Performance reviews can also help determine an employee’s readiness in taking additional responsibilities. 

Development Plan

The next step is making an employee development plan, as it helps the HR department create a clear direction on how to further the employees’ skills and abilities to support the company’s growth goals. 

Succession Plan

Creating a succession plan helps prevent minor disruptions when changes occur within the company, whether it’s a shift in the executive team or reorganization of departments.

Perform Gap Analysis 

A performance gap analysis lets the HR department determine where the company is falling short and helps identify what the company will need in the future. 

Following through with these steps is the key to dealing with any changes or shifts HR may come across, because a company can’t grow without goals and a plan to set them in action. 

Workforce planning and employment

It’s crucial to find employees who fit with the company and its ideals. Doing that isn’t always easy. Recruitment is the process of screening and selecting potential and qualified candidates. This process includes identifying and fulfilling talent needs, maintaining ethical hiring practices and negotiating salary and benefits. The recruitment process requires extensive research in order to produce quality hires. The recruitment process should encompass a comprehensive overview of the position available for hire [3]. Think about the employee needed to fulfill the role, the budget needed for this job to get done, and where this job opening will be posted (in store, online, in a newspaper, or through a hiring recruiter). Once the application has been posted, follow this checklist:

• Manage the applications. Sorting through resumes is time-consuming, but so, so worth it. Consider asking for help from a trusted employee to help pick the best individual for the position.
• Prep for the interviews. Develop the questions to ask prospective employees during an interview. Make sure to highlight the role they’d play in the business and whether they’d work well with the company as a whole. 
• Hire away. Before picking the ideal candidate for the position, check with the interviewee’s references and do a background check. Once that’s completed, it’s full steam ahead for the company’s newest employee. Well, once they’ve been introduced to HR, that is.

Training and Development 

When it comes to onboarding a new employee, there’s more to it than simply throwing him or her into the office and expecting the job to get done. Training and development starts at the beginning and never truly ends. That’s because the key to any organization’s success is providing its employees continued development, and HR is responsible for that. This includes training and preparing your newest model employees for their role, and providing training opportunities related to the employees’ respective fields. This doesn’t just give the employee room to grow, it also allows the company to flourish. 51 percent of professionals left their job in the last five years. One of the reasons being the lack of advancement opportunities [4].

SHRM consultant Jody Fosnough explained that investing in the company’s team doesn't necessarily mean paying for high-priced training programs. There are plenty of low-cost and free development opportunities managers can offer employees, such as suggesting certain trade publications to read, or introducing them to a staff or board member who is a subject matter expert or thought leader in a field they want to pursue. The key, she noted, is to find out what skills each team member is looking to develop or what type of position he or she hopes to grow into.

Consider carving out time with employees biweekly or monthly to discuss goals, training needs and other interests and issues.

Compensation and Benefits

Also within the role of HR management is the execution of compensation, salary and benefits. This includes staying up to date with competitive salary ranges and raises in the field, setting compensation levels and negotiating group health insurance rates, retirement plans and other benefits. 

Great compensation and benefit plans ensure that good employees are rewarded fairly, which motivates employees to improve performance. These plans also are important to attract new talent [5]. 

Most career-minded professionals apply for specific jobs because of salary and incentive packages. Better compensation attracts better applicants. The HR department plays a strategic role in balancing the needs of the business with its employees as the market changes, and the benefits along with it.

Of course, there is a difference between compensation and benefits. While compensation refers to an employee’s wages, salary or tips, benefits are its own beast entirely. Benefits are more motivational. Benefits like vacation time, sick leave and unemployment are all basic examples, most of which are required by law. But some companies tend to go above and beyond with their benefits. Benefits are motivational tools that incentivize workers to go the extra mile at work [6]. Benefit plans are specifically designed to fulfill the needs of the employees and they are also oriented towards the overall objectives of the organization. Some of the goals of offering employee benefits include the following: improve employee satisfaction, attract new employees as well as to satisfy the employees already working within the company. 

When creating a benefits plan, consider associated costs. Even though the employees won’t necessarily get paid more, time off and perks do cost the company money. 

Policy Formulation

Every company is different in the way they operate, but one thing remains the same within the human resources department, and that’s implementing policy. The HR team is tasked with orienting new employees and updating tenured staffers with the company’s policies and procedures. This means acquainting office personnel with the employee handbook, code of conduct manual and/or performance appraisal guidelines.

Of course, there is a difference in implementing policies depending on the size of the company. A  small business with 15 employees is far less structured than a business with 300 employees. That doesn’t mean that the role HR plays with policy isn’t any less important, though. 

It’s up to the HR department to create achievable objectives.HR policies are continuing guidelines of the organization that are intended for adoption in managing its people. Basically, HR sets the standard for how employees should be treated and disciplined. These policies need to be clear and concise and easy to follow. Gray area in policy makes for a mess that HR would most likely clean up. According to the Economist, policies should be taught. They should be controlled. Above all, the policies should be practicable.

Employee and Labor Relations

Employee relationships are a broad concept and it’s one of the most crucial functions of the HR department. Employee and labor relations is concerned with preventing and resolving problems involving employees, which stem out of or affect work situations. The story continues that employee and labor relations assists with general management regarding developing, maintaining and improving employee relationships via communication, performance management, processing grievances and/or disputes as well as interpreting and conveying company policies. 

Listening to your employees and making them feel valued is another major responsibility of HR management. This responsibility may encompass mediating disagreements between the employee and employer, between two employees, or discussing employee rights with management, unions and stakeholders. The HR department acts as the voice of the employee or organization when discussing employees’ welfare. 

Risk Management 

HR management’s final focus is on the potential threats that the company could face. The HR risk management team, along with the department’s manager, should be proactive in detecting risk items that could cause problems. This could involve risks around improper employee management, employee behavior, or the way a company hires and loses employees.  

Proper HR risk management doesn’t just focus on entry-level employees. Everyone from part-time employees to managers are taken into account to help HR measure risks and potentially stop problems before they start. 

Whether a company faces issues internally or externally, it’s crucial for HR management to know how to act and react to any scenario that comes up. 

Here’s a few ways you can stop the fire before it blazes:

• Stay up to date on legal news. Laws change, and with it so should a company. Complying with both local and federal laws can make or break a company. Subscribe to local legal publications and set up news alerts for employment law so you can ensure that you stay in the know. 
• Communicate with IT. Communication and technology go hand-in-hand. Make sure that the information technology department is informed with security, both online and in-house. 
• Hold managers accountable. Managers ought to be held responsible for their actions in the workplace. The Solvo study suggests working closely with managers mitigates any potential issues among employees. Do this by holding quarterly training sessions that can reinforce the right way to handle employee conflicts. Also consider asking employees to give feedback about their managers to see if there is room for growth. 

Buying Guide

• If you haven’t already found a payroll software to use at the company, check out Patriot, the mobile-friendly payroll software that works great for attendance and time tracking.

• Struggling to stay up to date? Check out the gorgeous planners Papier has to offer.

• The best way to stay up to date with the news — both in the HR world and otherwise — is by getting a New York Times newspaper subscription.

• Therapy might not be the answer to all of life’s problems — but it might just be the answer to most of the work-related ones, especially if things get stressful in the office. With BetterHelp, you get therapy in an app. You’ll be matched with one of the 22,000 licensed, board-accredited counselors for live therapy sessions at times that work for you.

• Communicate with your employees through Zoom. If they’re having trouble at work, or either of you has a question, hop onto the video chat and work it out.