Human Resources Is a Key Player in Business Strategy

Traditionally, a company’s human resources department has played a supportive role. It was considered a paper-pusher job and often took a back seat to more numbers-oriented departments like marketing and business development.

While HR still does plenty of paperwork, today’s organizations have realized this department can do much more to enhance and develop a business thanks to developments in fields like psychology, data analytics and recruiting.

“As soon as there’s an HR person in a small company, that person should negotiate for a strategic role where they’re not only doing recruiting and payroll, but setting policies for how that gets done and how management generally deals with people,” said John Schwarz, CEO and founder of workforce analytics company Visier. “HR shouldn’t be relegated to a role where they’re only called in when there’s a problem.”

Here are some of the roles HR staffers can play in small businesses.

1. HR has strategic responsibilities.

Using data analytics, HR staff can ask and answer questions about an organization’s future regarding issues like outsourcing, cost management and succession planning, Schwarz said.

“Ultimately, HR has the ability to provide the CEO and other executives with data, analytics, and advice so they can see where things are trending and can manage proactively,” added Gabrielle Toledano, COO at Keystone Strategy.

Along with succession planning and data analytics, HR is now responsible for creating better processes and training protocols. The best HR software can often help streamline these processes.

Juli Weber, director of recruiting at Conservice, agreed that HR has many strategic responsibilities, including obtaining and recording information from well-seasoned employees, figuring out the best ways to utilize people within the organization, and discovering effective management tactics.

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2. HR handles staffing and employee benefits.

For any business to succeed, it must attract and retain top talent in its field. However, this is becoming increasingly difficult. This is where a qualified HR professional can intervene.

“The talent shortage is real, and it continues to affect employers globally,” said Bram Lowsky, chief sales officer at Randstad RiseSmart.

Lowsky noted that HR must understand and anticipate an organization’s talent needs, know where to find that talent, and balance the equation. HR recruitment strategies should also use consumer marketing principles to build an internal employer brand that attracts and retains employees.

“HR is evolving to start looking at the marketplace differently because of the skills shortage and talent gap,” Lowsky said. “We’re building the workforce differently than just the traditional ‘full time and part time.’ [With] full-time, part-time, contingent workers, volunteers, etc. … HR can build and mobilize a culture to attract the talent you want.”

Weber told Business News Daily that benefits might evolve or change to attract top talent. For example, some businesses offer to make payments toward student loans rather than contributions to a 401(k), a practice that appeals to many applicants.

Expand your view of HR functions to include employee benefits packages for current team members and future employees.

3. HR handles employee development and other internal processes.

It’s becoming increasingly important for HR to improve internal processes, create succession ladders, set up professional development and new-hire training programs, and enrich company culture.

One way to do this is to use industrial-organizational psychology to evaluate and improve an organization, Weber advised.

The science of behavior is helping HR representatives create effective training, leadership and management systems, and assist other areas of the organization. Due to the science behind these movements, HR is under less pressure to prove every aspect of the ROI of such endeavors.

“The ROI no longer has to be proven; it’s just assumed,” Weber said.

Succession ladders that ensure organizational continuity are particularly important because businesses suffer when founders die or retire.

4. Marketing is a crucial HR function.

HR personnel have become marketers, creating marketing plans to get employees on board as the department designs new protocols and processes.

“We’re looking at the HR department as its own entity, kind of like a business inside of a business,” Weber said. “Our employees are our customers, and HR has to market programs, processes, and training to them.”

HR professionals also must understand the financial impact of decisions so they can market new ideas and processes to the employer, Weber noted.

If a full-time HR professional isn’t a fit for your company, consider outsourcing your HR needs to one of the best HR outsourcing services or using a professional employer organization.

5. HR is responsible for compensation and payroll.

Ensuring timely, accurate employee pay as your company’s team expands sufficiently is often the reason for hiring an HR staffer. Increasingly, though, payroll HR functions extend beyond administration.

HR teams may now play a part in setting the company’s salary range, pay scale and structure, including establishing competitive pay rates. An in-house HR person must be able to explain the company’s pay structure to employees and stakeholders alike.

6. HR is responsible for safety and health.

HR functions include ensuring employee safety and health on the job, whether in the office or the field. Your HR team should check that all your operations comply with OSHA standards. HR staff should also train employees in the safest ways to use your equipment.

HR’s safety and health functions are essential even in offices that seem to lack dangerous equipment. Workplace safety hazards include common tripping hazards, such as an extension cord that runs across your office floor. Your HR staff should remind your team of basic safety measures, such as keeping floors clear. It should also train your employees on job-specific machinery.

OSHA may have specific safety requirements for your industry. Your state, county and city may have their own rules. HR functions should include looking into regulations for each to keep your company compliant.

7. HR handles employee and labor relations.

Employee and labor relations may be the HR function most commonly associated with HR work. This HR function encompasses all steps the HR department takes to resolve disputes among your employees. It also involves developing and expanding upon employee relationships in the first place, well before workplace conflicts arise.

In some instances, HR employee relations responsibilities can go beyond these duties. Two such situations come to mind: taking disciplinary action and collective bargaining.

Should an employee cross a serious line – say, sexual harassment or assault – your HR team must discipline the employee according to your company’s disciplinary action policy, which they’ve likely helped to develop.

HR can also represent company higher-ups in collective bargaining between a business and its employees. Such situations can arise when employees unionize or go on strike to achieve changes in wages and/or working conditions. In these cases, your HR team should negotiate rather than stonewall. The media is paying increased attention to labor relations, and negative coverage of your business will hamper your HR team’s functions.

Jill Bowers and Nicole Fallon contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.