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Which are exactly the HR Functions?

HR still is unknown for most professionals. If you ask them, so.. what is that HR does in your company? They will most probably not be able to tell you everything. HR functions are wide and varied, so on this article you will be able to find the amount of things that are done, or could be done by your HR department.

If your company is growing and you are thinking about setting up the structure of a HR Department, there are certain things that you need to consider before doing any work. We have listed all the points to consider so you don’t waste your valuable time.

For years Human Resources has been only personnel, or just hiring and firing. Luckily, we are moving away from that, but that is still the case in many organisations. However, the HR function can vary from one company to the next one, specially depending on the industry, the local labour law, which can make harder the function in certain countries or regions, and needs on any given time.

But there is always a common ground for any HR department which covers the following key functions of an hr department.

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HR Areas

The CIPD (Chartered Institute of Personnel and Development in the UK) designed a map for the profession and we believe it can be clarifying for an small and medium enterprise owner to start understanding what a HR department needs and how they can help your company.

The map divides the HR functions into 8 areas. However, we have divided some of them in subareas, so you can have a better comprehension of HR by the end of this post.

A. Resourcing and Talent Planning

This area is the one everyone knows. The beginning of the relationship. This area, which is only a tiny part in time of the working relationship, but it is extremely important to do it well. If you miss one of these steps your problems could be greater at a later stage.

Resourcing and talent planning can be as fun and as boring as you want. Meeting new people and getting to know how their current companies work is one of the most enjoyable things for people who work in Human Resources, so plan it and enjoy!

A. 1 Talent demand planning

Planning your SME’s strategy for a long medium term is not only good for your sales and finances, but also it helps you to know in advance what you will need in terms of talent for the next year. If you have this in mind, recruitment and many other HR tactics could be much simpler.

A. 2 Recruitment and Selection

Recruitment and Selection are two different things, even though they always go together. Recruitment is the atracction of candidates, advertising, networking, etc.. Selection is the part where you analyse the profiles available and interested and you select those that you prefer to work with you. Usually they are done by the same person, but you could externalise the recruitment side if you feel that you are not attracting the right profiles. We have a whole section on this, so check here for further detail

A.3 Onboarding

Or how to make everyone’s life as easy as possible from the very beginning. Onboarding has been the trendy word for some time now. However, everyone thinks that Onboarding is just preparing a nice notebook, a mug and a fantastic first day for your new employee… this is a good thing, but it should be much longer if you really want things to work. We have described in detail all the steps that any organisation should take in order to have the perfect onboarding process, so if you are going through this now, you can start planning.

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B. Learning, Training, Development and Capacity Building

On the current market conditions your employees will always need to update their knowledge, it really doesn’t matter what they do, there is always a new technology, or tool that they could be using. This HR function is not only about the budget you have to spend, is about planning for the future.

Where do you want your company to be in 5 years? what kind of knowledge or experience will your employees need to get there? how long will it take them? which are the best trainings for them to gain that new knowledge?

There are plenty of online training resources, even for free, but your company needs to evaluate that in order to chose the best option.

C. Compensations and Reward

Your employees work and you pay them, but is that all? How much do you pay them? Based on performance? How do you measure that performance? how is that affecting their monetary salary?

Do you provide something else to your employees apart from the money that goes into their bank accounts? any perks or benefits? training as a reward? As all the decissions taken in your company, all this should have an structure so it can help you negotiating with providers and offering an structure salary pack to your employees. If you want some ideas, we did a post on employee benefits for SMEs that could help

D. Employee Engagement

This area is about the planning and analysis on how to retain your employees. How to make the good ones stay with you for as long as possible. Recruiting and training someone is costy and time consuming, so you don’t want them to go. When planning any improvement on your employee engagement, make sure you hear their complaints and suggestions. Don’t do things that would make YOU happy.

E. Employee Relations

This area is all about legislation, best practices, policies… anything that could save your life or make it misserable. Get the best advice on this and never ever think “this will not happen in my company, I trust my people”

F. Service Delivery and Information

Service delivery is one of the most time consuming HR functions. If you do it right from the very beginning it can be easy and it could give you plenty of information.

Service delivery is about providing the basics of personnel, Admin, paperwork, etc… but also is where you could get very valuable information about your company. Where did most of your employees study? maybe you should focus in recruiting only in one university. When do all your employees request holiday? when do they get sick? what kind of sickness? is it always after a bank holiday? should you modify your annual leave policy? are all your employees parents? how can this affect you? what postive things could you get from that?

As you see, there are tons of valuable information that could help you if information is organised and analysed.

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G. Organisation design

And last but not least, Organisation design, which from our point of view is the most important HR function. Organisation design is about planning the roles in the company, what they do, their responsibilities. But is also about how you want them to evolve in the future. How will those roles change in 3 years? what will happen if the person that is currently working as a finance admin wants to grow… could that be possible? what kind of knowledge will that person need to grow? do they have it? are they working on it? We would strongly recommend to think carefully about these possible situations to avoid problems in the future.

Some places add health and safety to this list. However, in bigger organisations that usually goes under operations and office management.

Before you start working on any structure for your future HR department, analyse how this is currently working in your organisation.

  • Is someone currently doing any of those activities? Do you have someone working with some of the functions of a HR Manager?
  • Which are your priorities for the next year as a business?
  • What do you want to achieve as a business?
  • What do you need in order to do that?
  • Is your business compliant with the current employment laws of the country?
  • How do you think introducing HR services will help you to achieve those business objectives.

Focus on those questions and you will have the first activity to start working on and you will have the main HR functions needed at your company and the basic concepts to start planning your HR area.

We will keep publishing different articles for each of the areas so you can planify how to structure each of those areas

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