Did you know that the cost of hiring is one of the big costs that a company has to bear? It includes the cost of job advertisement, external recruiter fees, recruitment software, etc. As per LinkedIn, the average cost of a hire is ₹82,840. Now, consider the amount of resources that human resources professionals can save just by making good hires! But, Human Resource Management (HRM) functions go beyond just hiring, payroll, workforce utilization, labor relations, or open enrollment. HR professionals are crucial in establishing a company culture, developing employee engagement activities, and building a company’s people strategy. A well-functioning HR department is essential for the success of any business, regardless of its size.
The following are the top functions of HRM and also how these can foster growth for the organization.
Top Functions of Human Resource Management That Drive Business Success
1. Controlling Budget
The HR department devises ways to reduce expenses related to workforce management, thereby curbing unnecessary spending and resulting in long-term cost savings for the company. Furthermore, the HR department researches and examines employment patterns, labor market trends, and job function-based salaries to ensure the company’s remuneration is competitive and practical.
2. Employee Satisfaction
The HR team assesses the satisfaction levels of employees. They also identify the causes or factors contributing to employee dissatisfaction and find ways to keep them engaged. This helps address any concerns and boosts the morale of the employees throughout the company.
3. Training and Development
The functions of human resource management include identifying the specific training and skills required by different teams to perform their respective duties effectively. Without recommended skill sets among employees, HRs are tasked with providing the right learning toolkit to the specific employee.
4. Conflict Resolution
Workplace conflicts are inevitable. An HR manager with specialized expertise in managing employee relations can proficiently recognize and address conflicts between a manager and an employee or among employees. Therefore, they can help foster amicable working relationships across the organization.
How Can HR Analytics Improve the Effectiveness of Human Resource Management?
HR analytics involves data analysis and statistical methods to extract meaningful insights and make informed decisions. It improves the effectiveness of human resource management. Here’s how HR analytics improves HRM’s effectiveness.
- HR analytics aids in the identification of Key Performance Indicators (KPIs) that are used to assess the success of HRM initiatives. By tracking KPIs, HR professionals can better understand the effectiveness of their HR policies and identify areas that require improvement.
- HR analytics can provide valuable insights into employee behavior, including factors contributing to employee engagement and turnover. This information can be used to develop strategies to improve employee retention, engagement, and job satisfaction.
- HR analytics can identify skill gaps and training needs among employees. This enables HR professionals to develop targeted training programs to help bridge these gaps and develop employees’ skill sets.
What is the Role of HR in Talent Management and Succession Planning?
Talent management involves identifying and developing employees who can take leadership positions and contribute to the company’s long-term success.
Succession planning, on the other hand, involves identifying and grooming suitable candidates to fill critical positions that may become vacant due to retirement, promotion, or other reasons.
Here’s the role of HR in talent management and succession planning.
- The HR department is responsible for developing and implementing talent management and succession planning strategies. Therefore, they identify high-potential employees and create development plans to help them acquire the necessary skills and knowledge to succeed in leadership positions.
- The functions of the human resource department also include providing proper training and mentoring programs to employees to support talent development.
- Additionally, the HR department is critical in identifying key positions that require succession planning. They work closely with department managers to identify potential candidates with the skills and experience necessary to fill these roles.
- Ultimately, the HR team ensures that these candidates are given the necessary training and development opportunities to prepare them for future leadership positions.
How Does HR Management Impact Employee Engagement and Retention?
1. Recruitment and Selection
The HR department plays a crucial role in recruiting and selecting new employees. The HR department can ensure that employees are a good fit for the organization’s culture by hiring the right candidates with the necessary skills, knowledge, and attitude. This leads to higher employee engagement and lower turnover rates.
A well-planned onboarding process can help new employees feel welcome and valued. It can also help them understand their role and responsibilities, the company culture, and job expectations. This can contribute to higher employee engagement and better retention rates.
3. Training and Development
Offering training and development opportunities to employees can enhance their skills and knowledge. Employees who feel that they are growing in the organization will put in extra effort and will also feel satisfied with themselves and the organization. This can also help retain employees considering leaving for better career opportunities.
4. Performance Management
The HR department is responsible for implementing performance management systems that assess and recognize employee performance. A fair and transparent performance management system can motivate employees to perform better and provide a sense of achievement. This can lead to higher employee engagement and better retention rates.
5. Employee Benefits
HR departments are responsible for designing and administering employee benefit programs such as health insurance, retirement plans, and paid time off. A competitive and comprehensive benefits package can enhance employee satisfaction and loyalty, leading to higher retention rates.
Trends and Best Practices for HR Management in 2023
Remote Work and Flexibility
With the shift towards remote work due to the pandemic, HR departments have had to adapt to managing employees working from home. Consequently, this has led to an emphasis on flexibility in work arrangements, including remote work policies, flexible schedules, and alternative work arrangements.
Diversity, Equity, and Inclusion (DEI)
There is a growing focus on DEI in HR management, with organizations recognizing the importance of creating a diverse and inclusive workforce. This includes implementing policies and programs that promote diversity and inclusion, such as unconscious bias training, inclusive hiring practices, and employee resource groups.
HR departments are increasingly prioritizing employee well-being and mental health. This includes offering employee assistance programs, mental health resources, and flexible work arrangements to help employees manage work-life balance.
Data-Driven HR Management
The use of data and analytics is becoming increasingly important in HR management. By analyzing HR data, organizations can gain insights into employee engagement, performance, and retention and make data-driven decisions about HR practices.
Agile HR Management
Agile HR management involves adopting an iterative and flexible approach to HR processes to respond to changing business needs. This includes adopting agile methodologies such as design thinking and scrum and using technology to automate and streamline HR processes.
Upskilling and Reskilling
HR departments must focus on regularly upskilling and reskilling employees, thanks to the incredibly competitive business landscape. It includes offering training programs to help employees develop new skills and stay up-to-date with the latest technologies and trends.
Learn with Emeritus
Emeritus offers human resources courses on HR management that can help aspirants and individuals develop skills in recruitment, employee relations, benefits administration, performance management, compliance with labor laws and regulations, etc. These courses can help individuals develop the skills and knowledge necessary to succeed in HR and positively impact the organization.