The Functions and Departments of HR: A Complete Guide

By Indeed Editorial Team

Published 23 August 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A human resources department is central to the functioning of any business establishment or organisation. A variety of tasks and departments come under the umbrella of human resources. As you begin your job search, it is beneficial to understand the functions of these departments and the role they play in recruiting, hiring, training and managing employees. In this article, we examine the various departments of HR and their functions.

What role does the HR department play in an organisation?

The term "human resources," or HR, refers to all the people who contribute to an organisation through their work in any capacity. This includes the company's entire workforce, like regular employees, independent contractors, interns and even external companies to which the company may outsource work. The HR department of a company is responsible for carrying out employment-related activities in a company. The department works to manage the life cycle of labour within the company and handles tasks such as hiring, interviewing, retaining, training and terminating employees. It also assesses employee performance and determines the remuneration and benefits of employees.

The role of the HR department has evolved significantly due to globalisation and the subsequent shifts it has produced in the labour market. While many companies delegate HR tasks to short-term contractors, talent agencies and freelancers, regular employees can still enjoy additional benefits and higher job security.

Related: Top HR Skills and Activities

What are the 7 functions of HR?

The seven primary functions of an HR department include:

1. Staffing

Staffing includes all activities and procedures related to hiring, recruitment and termination. Although the terms hiring and recruitment are used interchangeably, it is important to note that hiring is done to address an immediate staffing need. Recruitment on the other hand is a systematic, long-drawn process that aims to address a company's overall staffing requirements. Staffing activities may include:

  • Making strategies for attracting and retaining talent

  • Identifying a company's human resource needs

  • Using technology to review job applications

  • Processing, drafting and archiving employment contracts

  • Maintaining adherence to employment regulations and mandated protocols

  • Negotiating employee benefits and remuneration

Related: Recruitment Process: A Step-by-Step Guide

2. Training and development

The HR department is also responsible for facilitating the development of human resources through training procedures. These procedures may be outlined by management or developed within the HR department itself. The department may also provide new employees with access to a variety of resources that are required to perform successfully in their job roles. Development activities typically include:

  • Developing and conducting training activities for staff

  • Staying up to date on industry best practices and technological advancements to develop new training modules

  • Providing information about external skill development opportunities like online courses, workshops and conferences

  • Engaging in dialogue with management and senior stakeholders to improve existing training programmes

Related: Types of Workplace Training: Definitions and Examples

3. Performance management

The HR department is also tasked with the assessment of employee performance. The department then identifies areas for improvement and devises strategies like incentive plans to address shortcomings. The HR department conducts these analyses through appraisals, conducted on a quarterly, half-year or yearly basis. Appraisals assess a range of HR elements like employees' strengths, weaknesses, potential, accomplishments and behaviour. HR is also responsible for giving employees useful feedback for personal or professional skill development. Performance management, when done right, has the potential to improve employee morale and facilitate the growth of a company.

Related: How To Write a Self-Appraisal

4. Compensation

HR executives may determine policies regarding remuneration and benefits. Employee benefits may include health or life insurance, severance pay, paid time-off, retirement plans, employee discounts and performance bonuses. They also have to ensure compliance with legal regulations like tax laws and minimum wage requirements. Compensation activities usually include:

  • Studying market trends to identify pay scales for specific job roles

  • Negotiating with banks and insurance companies to get suitable deals for employees

  • Discussing matters relating to bonuses, pay raises and pay cuts with management

  • Communicating management decisions regarding remuneration and benefits to employees

  • Working with accountants or the accounts department to verify or process payment information

  • Examining legal frameworks to make good policies that comply with mandated norms

5. Health and safety

The HR department is, to an extent, responsible for the health and safety of its employees. They often develop policies and schemes to improve existing conditions. The department should have a general awareness of the best practices and regulations in this domain to be able to implement them. Safety and health activities of an HR department may include:

  • Ensuring compliance with mandated norms in the domain of health and safety

  • Implementing changes in policies according to changes in laws and regulations

  • Discussing health and safety policies with employees, management, labour unions and government representatives

6. Employee and labour relations

HR executives are responsible for protecting the rights of employees. They often need to settle disputes between the organisation and its employees or between two or more employees. Their employee and labour relations activities may include:

  • Settling disputes and disagreements between the company and its employees

  • Settling disputes and disagreements between the employees of a company

  • Investigating and addressing claims of bias, abuse, harassment or inappropriate behaviour within the workplace

  • Creating awareness about employee rights among management, senior stakeholders, labour union representatives and employees

  • Representing the company and its staff in a wider discourse about employee welfare, outside the workplace

7. Forecasting and planning

Forecasting and planning are done to devise a game plan for future HR activities and processes. For instance, the HR department often conducts assessments of labour requirements for future periods to make sound recruitment plans. Planning also involves a fair amount of speculative analysis and a study of trends relating to human resource availability and its associated costs.

Related: Human Resource Planning: Meaning, Importance and Key Steps

What are the different departments of HR?

The human resources department of a company typically has the following departments:

Talent management

Talent management departments are responsible for recruiting and retaining employees and extending their support for the collective success of the labour force. Hiring managers and recruiters are responsible for the sustained development of a company's workforce. Their duties include posting job vacancies, screening applications, conducting interviews, coordinating with upper management and facilitating onboarding procedures.

Talent management also includes employee relations and employee support. Professionals in these domains work to ensure good relations between the company and its workforce for smooth operation. They help the company and its employees address each other's concerns and grievances. Their success lies in generating results that benefit both the workforce and the employer.

Compensation and benefits

Depending on the size of the company and the scale of its operations, the HR department may have one or more employees working in the domain of compensation and benefits. HR professionals in this domain work toward establishing feasible remuneration structures by performing thorough evaluations of existing pay practices in the market. They may work with recruiters and hiring managers to ensure that the pay scale for a particular job is appropriate for the work involved and the expertise required.

This department also devises and implements attractive benefits policies to retain employees. Policies range from insurance and discounts to retirement and vacation plans. This department typically works in tandem with the accounts department. In some cases, accounts and payroll duties may be entirely outsourced by the company, and the compensation department will focus primarily on developing strategies and implementing them.

Training and development

Companies often provide their employees with the tools and resources they need to succeed in their respective job roles. These include physical tools like equipment, computers and workspaces but are not entirely limited to that. It is also important for companies to train their employees and aid their professional skill development. The training and development department of HR is responsible for conducting such processes.

Training sessions may include orientation programs, managerial training, leadership coaching and support in a variety of disciplines relevant to the industry. For example, a software development company may rely on a third party to conduct a week-long course to teach their lead programmers a useful programming language. The programmers may then work with the training department to create training modules for new employees that incorporate these new teachings.

Compliance

Compliance can be considered the legal wing of the HR department. Different companies may need to comply with different labour laws depending on their industry and geographical location. Legal parameters are ever-evolving and complex, and hence, companies require trained professionals to interpret, analyse and incorporate the legal aspects of human resource development. Failure to do this may result in legal battles, financial losses and bad publicity.

Workplace safety

Prescribed norms and mandated regulations exist in every industry to ensure safety in workplaces. The workplace safety department generates awareness among company stakeholders, management and employees to ensure that these regulations are adhered to. This department will also handle safety training and conduct periodic drills to help employees perform well in emergency situations like earthquakes, fires, floods or power outages. HR executives in this department may also maintain records of workplace accidents, injuries and the medical records of employees with chronic ailments.

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