What Is Human Resources (HR)? Functions, Roles and Common Skills

Human resources (HR) is a crucial department in any organization, responsible for overseeing the entire employee life cycle, including:

• recruiting
• hiring
• compensation
• compliance
• training
• engagement
• well-being

HR acts as a mediator between an organization’s management and employees to ensure companywide alignment and satisfaction.

How does HR work?

HR departments are responsible for managing the workforce of an organization. The field’s work includes the development and implementation of strategies and policies for:

• talent acquisition
• development
• performance evaluation
• employee relations

HR professionals also help ensure regulatory compliance, manage employee benefits and compensation, and help create a positive and productive culture in the workplace.

As it relates to human capital management (HCM), think of HR’s role as creating an environment for people to do their best work. HCM, on the other hand, helps organizations maximize their employees’ value.

What are the functions of HR?

HR’s scope encompasses a wide range of activities related to managing an organization’s workforce. Ideally, the department will rely on a human resource information system — or HR software — to automate and streamline routine processes.

Here’s an overview of the primary functions of HR.

Payroll

Payroll is the process of managing and processing employee compensation. It ensures that employees receive their wages or salaries on time and accurately, but it also includes other critical tasks, like:

• calculating pay according to hours worked or contractual agreements
• managing benefits such as pensions or health insurance
• deducting the correct amounts for taxes, Social Security and other contributions

Payroll also must comply with legal requirements, maintain detailed records for auditing purposes and handle any queries or issues that employees may have regarding their pay. This is a crucial part of maintaining employee satisfaction and trust while ensuring companies adhere to financial and legal standards.

Regulatory compliance

Regulatory compliance refers to the adherence to a set of laws and regulations that govern employment practices. This is a crucial role of HR departments, ensuring that the organization follows all legal requirements related to labor, including:

• fair hiring practices
• workplace safety
• minimum wage and hour laws
• employee benefits
• and more

HR professionals stay updated with the changes in employment law, create and implement policies and procedures to meet these regulations, and train management and staff to comply. They also take care of documentation and record-keeping to demonstrate compliance during audits.

A solid compliance strategy is essential for legal adherence and ethical standards, creating a fair and safe workplace environment. By effectively managing regulatory obligations, HR helps protect a business from costly fines and penalties and enhance its reputation as a responsible employer.

Benefits administration

Benefits administration involves managing and overseeing the employee benefits offered by an organization. This includes selecting and negotiating with benefits providers and enrolling employees in:

• health insurance
• retirement plans
• life insurance
• employee wellness programs

HR also helps employees understand policies related to time-off accruals, bonuses and more.

HR professionals in charge of benefits administration are responsible for maintaining compliance with relevant laws and regulations, like those included in retirement plans and health care coverage. They communicate benefits information to employees, assist them with enrollment and changes, and handle any questions or issues that arise regarding these benefits. This role is crucial in ensuring that employees understand and effectively use the benefits available to them, which can contribute to their overall satisfaction and well-being. This, in turn, can help improve employee retention and morale.

Recruitment and hiring

Recruitment and hiring involve the entire process of identifying, attracting, evaluating and appointing suitable candidates for jobs within an organization. This process starts with identifying staffing needs and defining job roles, followed by actively seeking out candidates through:

• job postings
• employment networks
• recruitment agencies

HR teams then screen and evaluate applicants, manage the interview process, and select the most suitable candidates. Additionally, this process includes conducting background checks and verifying references.

Moreover, HR plays a critical role in ensuring that the recruitment and hiring process is fair, unbiased and compliant with employment laws and regulations. Effective recruitment and hiring not only helps fill vacancies, it helps build a skilled and diverse workforce that aligns with the organization’s goals and culture, thereby supporting its overall success and growth.

Workforce planning and development

Workforce planning and development helps an organization align its employees with current and future goals. This could include:

• analyzing the current personnel’s capabilities
• forecasting future labor needs
• identifying skill gaps
• developing strategies to meet these requirements

HR teams tackle projects like succession planning, talent acquisition and the creation of employee development programs.

These processes help the organization maintain the ideal number of employees with the appropriate skills and competencies to achieve its business goals. Effective workforce planning and development means optimizing the use of HR, preparing for changes and challenges in the business environment, and supporting the long-term growth and sustainability of the organization.

Workplace policymaking

Another important HR responsibility, workplace policymaking, involves developing, implementing and maintaining policies that govern day-to-day operations and the overall culture of the workplace. These policies cover a wide range of issues, such as:

• employee conduct
• health and safety standards
• equal employment opportunity
• remote or hybrid work
• use of company resources

These policies aim to ensure a safe, fair and productive work environment that protects the business from legal risks.

HR teams are also responsible for creating and communicating corporate guidelines to all employees. They also provide necessary training and regularly update the policies to reflect changes in law, industry standards and organizational objectives. This helps foster a positive organizational culture and keeps business operations running smoothly and ethically.

Employee engagement

Employee engagement strategies help create a positive, motivating and engaging work environment for the employees. This role revolves around understanding and improving the emotional and intellectual commitment of the employees toward their work and the organization. To achieve this, HR teams often:

• organize team-building activities
• develop recognition and reward programs
• facilitate effective internal communication
• ensure employees have the necessary resources and support for success

They might also conduct surveys and gather feedback to understand employee sentiment and identify improvement areas. By prioritizing employee engagement, HR can boost job satisfaction levels in a way that increases productivity and reduces employee turnover. This can go a long way in supporting the overall performance and success of the organization.

Employee retention management

This refers to the implementation of strategies and practices to maintain a stable and committed workforce by reducing employee turnover. Retention strategies usually focus on understanding why employees stay or leave, addressing the underlying factors influencing their decision to remain with a company.

Employee retention management also includes:

• offering competitive salaries and benefits
• providing career advancement and professional development opportunities
• fostering a positive and inclusive work culture
• ensuring a healthy work-life balance

HR plays a key role in recognizing and rewarding employee achievements, offering constructive feedback, and maintaining open lines of communication to understand and address employee concerns.

By effectively managing employee retention, HR can enhance employee satisfaction and loyalty while minimizing the costs and disruptions associated with high turnover.

Ensure health and safety measures

Among the many responsibilities of an HR department, ensuring a safe and healthy work environment might be the most important. This usually involves:

• implementing policies and practices that comply with occupational health and safety laws and regulations
• identifying potential workplace hazards
• taking preventive measures to reduce the risk of accidents and injuries

HR teams are responsible for arranging employee health and safety training, conducting regular inspections and managing emergency response procedures. Some HR organizations also offer wellness programs supporting employees’ physical and mental health needs.

What is the role of HR in hiring?

HR departments play an essential role in the hiring process. In fact, they often manage the entire recruitment process, from identifying staffing needs to onboarding new employees. HR may:

• create job descriptions
• advertise vacancies
• screen applicants
• conduct interviews
• coordinate the selection process

All the while, HR has to ensure that the hiring process is efficient and fair and complies with employment laws and organizational policies.

What are the different types of HR roles?

Several types of HR roles exist. HR generalists are responsible for a wide range of functions, while specialists focus on specific areas like recruitment, training and development, or benefits administration. HR managers, on the other hand, oversee the entire HR department and are responsible for strategic planning. And HR directors help align those strategies with business objectives at an executive level.

Bigger organizations may need HR analysts to parse through massive amounts of data, while labor relations specialists focus on employee relations and union interactions.

What is a human resource specialist?

A human resource specialist is someone who specializes in a specific area of the HR field. This could be:

• recruitment
• employee relations
• training and development
• compensation and benefits
• or another area entirely

These specialists must have extensive knowledge and expertise in their subject. They also play a vital role in the overall workforce strategy.

Why is HR important?

HR is crucial in managing an organization’s people, helping attract, hire and retain the right talent to help achieve its business goals. With effective recruitment strategies, benefits management and development opportunities, HR helps attract skilled candidates while fostering a loyal and capable workforce.

Beyond personnel matters, HR can help mold organizational culture and increase employee engagement. Initiatives that promote a positive work environment, including diversity, equity and inclusion (DEI) practices, are pivotal factors in employee satisfaction and morale. Such policies are designed to improve productivity in a way that encourages collaboration and innovation.

HR’s role in compliance cannot be overstated, either. The department helps ensure adherence to complex labor laws and regulations in a way that protects the organization from legal risks and sustains ethical business practices. The ethical treatment of employees is vital for maintaining a reputable and responsible business, and HR is right at the center of it.

In other words, HR is more than just managing personnel; it’s integral to strategic planning and organizational development. By aligning HR strategies with business objectives, these departments are a positive force for a business’s overall health and sustainability.

How does HR provide support to employees in an organization?

HR is responsible for addressing a wide range of employee-related issues, from onboarding new hires to navigating workplace challenges. The policies and programs they implement help employees feel valued and secure in their roles.

HR also promotes a positive workplace culture through DEI efforts, creating an environment where all employees feel respected and heard. This means not only adhering to equal opportunity laws, but creating workplace initiatives that celebrate diversity and inclusion as well. Through regular training and development sessions, HR can equip employees with new skills and knowledge that aid in their professional growth and adaptability in an ever-evolving business world.

On top of all that, HR often deals with grievances, providing a structured mechanism for employees to express their concerns and seek resolutions. By maintaining open lines of communication and offering a confidential avenue for discussing issues, HR is pivotal in resolving conflicts and maintaining a harmonious work environment.

Common skills needed in HR

Working in HR requires a unique combination of interpersonal, technical and strategic skills. Here are just a few.

Strong communication skills

Effective communication is essential for engaging with employees across different levels, as HR teams often conduct interviews and provide ongoing employee training.

Empathy and emotional intelligence

In this line of work, empathy and emotional intelligence can go a long way toward understanding and addressing employee concerns, facilitating conflict resolution and fostering a positive workplace culture.

Technical skills

On the technical side, HR pros benefit from skills like data analysis, which helps them make informed decisions based on workplace trends and metrics.

Legal awareness

HR professionals also need a solid grasp of labor laws and compliance regulations — knowledge that helps with tasks like payroll processing, benefits administration, and maintaining high legal and ethical standards across the organization.

Strategic thinking and problem-solving

The most successful people in HR typically have superior strategic thinking and problem-solving skills, as HR is increasingly involved in aligning HR strategies with overall business objectives.

Flexibility

Ultimately, adaptability and a continuous learning mindset are critical, given the industry’s ever-evolving labor laws, workplace dynamics and technological advancements. Staying on top of these changes and being able to adjust strategies accordingly is essential for any successful HR professional.

Explore Paycom’s resources to learn about other foundational HR topics and more.