If you are starting a business, or your business is growing enough to bring on employees, then you may need to start your own HR department.
The HR department is essential to every business. It plays a key role in a company’s success and long-term growth. However, as it stands, many do not know what exactly it is that an HR department does. In truth, the department wears many hats, and many vital roles within the company take place within the department.
To help you better understand and prepare your HR department, here is a detailed guide describing who they are, what they do, and how they affect your business.
What does HR stand for, and what do they do?
As you may already know, HR stands for Human Resources. Sadly, the name is not much of an indicator as to what they do precisely.
Generally speaking, an HR department is responsible for every employee’s life within the business. That means everything from recruiting to firing. The HR department of a company handles many important tasks related to employees, including:
Recruitment
The Human Resources department is usually in charge of recruiting within the business. It is up to the HR department to research where the company is lacking, where they need help, what kind of help they need, and what they are looking for within a candidate. In order to do this accurately, they will need to take the time to take a good look at the company, look at the market, look at the budgets, and look at the potential for new employees.
Taking on new employees may sound simple. However, the work required can take a long time and a lot of money. There will need to be interviews, working time spent on research, ads for the position, and of course, finding the right person.
A good recruiter knows what to look for in specific roles. This entails having a working knowledge of the different positions within the company. A poorly matched employee can create many problems for a company. These issues often end up back in the HR department.
Beyond the right person being chosen for the job, the Human Resources department will also have to complete all of the paperwork regarding their employment etc.
Handling the payroll
The HR department is also in charge of handling the payroll every month. This means knowing the salary of each individual employee, counting overtime, bonuses, cuts, sick pay, maternity pay, taxes, raises, etc.
As you can imagine, the bigger the company, the more complicated this is. Making sure that everyone is paid what they are owed, that the filing system is kept in order, and that all of the relevant taxes are taken into account for each employee can be an absolute nightmare.
However, its efficiency is key to the success of the company. One mistake can go a long way. The whole process takes time and care and needs to be done monthly!
Handle the employee discipline
This, sadly, is what most people know HR for. They are known as being the ‘bad guys’ of every company, as it is the HR departments job to deal with all disciplinary actions that need to be taken against employees. They have to deal with employees that are constantly late, all the way to those against whom complaints have been made.
A good HR department will know how to handle various situations the best way. Of course, all situations are unique in their own right when it comes to employees, and all situations will require care and a responsible attitude. Of course, sometimes this means the HR department has to put the company’s needs first, which does not always please the employee in question.
On the other hand, if an employee has a complaint or worries about the company or someone within, then the HR department is best placed to handle the situation and has a duty to protect and help the employee.
An experienced HR department will know how to apply their knowledge to the range of diverse situations that they will face constantly. Ultimately, their decisions have a serious impact on the company and the employees.
Review the company’s policies
It is up to the Human Resource department to ensure that the company’s policies and rules are always up to date regarding the law and the company’s evolution. Policies are constantly changing and need to reflect the company’s beliefs and brand, as well as take into account what is best for everyone within the company.
They will need to be carefully worded, reviewed, and applied as soon as they are published. It is also up to the HR department to ensure that all of the employees are aware of the policies and any changes made to them.
Keep the company’s employee records
By law, the HR department of a company has to keep and maintain all employee records, past and present. An employee’s records will have their time with the company noted, their skillset, their salaries, their emergency contacts, their own contact information, etc. It is also beneficial to the company as they re-evaluate an employee’s current status and position within the company.
Monitor employee benefits
The benefits that are available in a job has a lot to do with the candidate that applies for it and an employee’s wanting to remain a part of a company. Should the benefits not be as impressive as those that they would find in a similar job elsewhere, then they will either not apply for the job or not remain within the company.
This can be the cause of frequent employee turnover, which is never good for a company’s image or productivity. Benefits can include health insurance, dental insurance, a company car, pet insurance, etc. Of course, the benefits need to be carefully analysed, as different positions will require different benefits and to different extents. All of this must also be considered in the company’s budget.
How does a good Human Resources department support business growth?
As you have seen, the various roles that the Human Resources department will play in your business are all vital. The differences between a good HR department and a bad one could easily be the difference between a successful and long-lasting business and one that fails.
Think about it from the perspective of one single employee. Suppose during the recruitment process alone, the HR department hires an experienced, intelligent, hungry, and dedicated employee. In that case, their success within the business will be far greater than that of someone who doesn’t care, does not try, and isn’t interested.
The better employee will be eager to learn and please, which will only help the company’s productivity level. It will also give a better image to the business, as it is indeed represented by everyone who works there. A happy and fulfilled employee will only help a brand, whereas the opposite will only detract from it.
Next, that same employee will want and deserve a reasonable salary for their work. A good salary will make them more likely to continue with the company and attract other employees. The company’s budget should also be taken into account when deciding upon an employee’s salary. A salary that is too high will not be able to last, and changing it during an employee’s contract will be liable to judicial pursuits. Moreover, it could obviously severely impact a company’s budget for the foreseeable future!
However, a salary that is too low will not attract any candidate. This could risk the company not getting the employees that they need.
What is the impact a Human Resources Department has on employees?
Next, an employee’s life within the company will impact their career, happiness, and safety; it will also affect a company’s image and longevity. An unsuitable work environment should not be accepted. It is up to the HR department to ensure that the employees are satisfied with their current working conditions.
Finally, in order to ensure that the company is within the law on all fronts, the HR department will have to take the tax obligations regarding the employee into account, as well as their records.
Now, imagine this on a grand scale, with hundreds, or even thousands of employees? Each one will need to be considered individually and carefully.
As employees are the backbone of every business, it is essential to have a functioning and efficient HR department. For now, if your business is growing, it is up to you to ensure that you hire the right people for the department and that they are acutely aware of all of their duties regarding the company and employees.
If you are eager to succeed then All Things Business can help you grow your business, why not call us on 01604 250 900.
