Human resources is a department that manages an organization’s employees and supports compliance efforts. Some tasks central to that mission include processing payroll, administering benefits, communicating and enforcing company policies, resolving workplace conflicts, keeping up with regulations, hiring and training employees, and setting compensation levels. These responsibilities may be fulfilled by one person or many trained professionals, but regardless of size, HR is critical because people are an employer’s most valuable asset.
What is a human resource?
A human resource is any person compensated for supplying skills or knowledge to help an organization achieve its business goals. Compared to other resources, such as equipment or facilities, people tend to require the most management, which is why many employers have dedicated HR services.
How does HR support employees?
An employee might associate HR with new-hire orientation and open enrollment periods, but it’s far more encompassing. Some of HR’s core functions include:
- Payroll and tax administration
Processing payroll and depositing and filing payroll taxes according to best practices is how HR helps employers satisfy obligations to their employees and the government. - Regulatory compliance
HR must keep up with ongoing changes to employment regulations and develop proactive compliance management strategies to protect the business from costly penalties. - Talent Management
Strategic recruitment, learning and development, compensation benchmarking, and performance management are ways HR helps organizations attract top talent and further their growth. - Onboarding and new hire orientation
HR professionals make new hires feel welcome and give them the tools they need to succeed or risk poor productivity, engagement and retention rates. - Benefits administration
If an employer decides to offer benefits, HR is tasked with open enrollment, invoice reconciliation, reporting, and employee support. - Policy creation
HR is responsible for creating and enforcing policies that ensure safe, equitable, and inclusive work environments. - Employee relations
In addition to fielding employees inquiries about their pay, benefits or career path, HR must resolve workplace conflicts when they arise.
How does HR add value to a company?
HR can help employers maximize their return on investment (ROI) in people. This goal is achieved by:
- Recruiting and hiring top talent to gain a competitive edge
- Embracing integrated HR solutions that improve efficiency and productivity
- Supporting compliance to help reduce the risk of fines, penalties and lawsuits
- Fostering workplace cultures that keep employees engaged
- Leveraging people analytics and benchmark data to make more informed business decisions
- Making employees change-ready and adaptable with ongoing training programs
Types of human resources support
Employers have two options when managing HR: hiring an internal team or partnering with a third party. Which one they choose largely depends on the size of their workforce and individual needs.
Internal HR departments
Employed HR professionals get to know the business thoroughly, including its processes and policies, and develop relationships with its employees. As a result, they’re often able to field questions and address issues in the workplace quickly.
External partners
Organizations sometimes turn to third-party vendors for specialized or full-service HR expertise and assistance when necessary. These services may supplement or substitute an in-house HR person or team:
- Administrative services offering (ASO)
Employers might opt for an ASO if they need additional HR support. The vendor usually provides a technology platform with a help desk or may handle specific HR duties on the employer’s behalf.
- HR outsourcing
Sometimes, employers don’t have the expertise or the resources to handle HR in-house. In such cases, it may make sense to outsource some or all of the responsibilities to a third party that specializing in HR, payroll, benefits administration, and talent management.
- Professional employer organization (PEO)
Employers gain a full-service HR partner and access to a technology suite in a co-employment relationship. PEOs allow small and mid-sized businesses to offer their employees high-quality benefits typically only available at larger companies.
- Human capital management (HCM) managed services
Managed services provide proven best practices and standard operating procedures that can help large businesses improve their work and focus more on strategic growth. This fully integrated outsourcing solution includes end-to-end HR, payroll and taxes, talent, benefits, and time and labour.
Frequently Asked Questions
Why is it called HR?
Human resources is aptly named because people, like equipment or supplies, are an asset businesses depend upon to achieve their objectives. In fact, employees are usually considered the most valuable of all the resources available to employers.
Why is HR important?
HR is important because it helps employers recruit in-demand talent and create safe, inclusive workplaces where employees can be their most productive. In addition, many HR responsibilities, such as payroll and regulatory compliance, are essential to avoiding costly violations.
What are the seven functions of HR?
There are many HR functions, but seven of the most common are:
- Payroll and tax administration
- Regulatory compliance
- Benefits administration
- Recruitment and hiring
- Workforce training and development
- Employee relations
- Workplace policymaking
What is an example of how HR works?
Suppose a recruiter lands several candidates who have accepted an offer to come to work for an employer. At this point, HR begins onboarding, which typically consists of running background checks and completing new hire paperwork. The department then schedules an orientation on the first day so the new employees can meet their coworkers and managers, learn about company policy, and receive any necessary training.
Learn More
Ready to focus on strategy and less on mundane payroll and HR tasks? You need the expertise and support of an experienced HR partner. No matter your challenge, ADP has the experience and solutions to help you reduce your burdens and risks.
Learn more about the benefits of outsourcing HR and payroll: Call 866-622-8153 or start a quote to get started.
This article is intended to be used as a starting point in analyzing human resources and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.
