Human resource management is a term that first arose in the 1960s when the value of labor relations began to garner attention. Before this time, management would mainly focus on the output and profits of an organization without looking at the resources and people behind it that were responsible for these measurable results. Now, fast forward more than 50 years, and Human resource management has expanded into many areas of focus and disciplines, with formal education and certification programs available for each area.
What are typical areas of human resource management?
The major areas of human resource management are as follows1:
- Recruiting and staffing
- Compensation and benefits
- Training and learning
- Labor and employee relations
- Organization development
Of these areas, a human resource professional may specialize in a particular field that falls within one of these significant areas. For example, when it comes to compensation and benefits, one may specialize in either compensation analysis or benefits counseling and administration. As organizations grow in size, more dedicated headcount can cover these areas, such that each may consist of an entire department or team of human resource professionals.
Why HR management is so important
The traditional role of human resource management is to develop and administer programs and policies that impact the people that are employed by the organization. The goal is for human resource management to recruit, hire, develop, and retain top talent to maximize the contribution of each employee. There can be many soft factors involved that may be more difficult to measure, such as corporate culture and diversity and inclusion, but survey methods mainly help HR departments capture data in these areas today.
With time, the role of human resource management has become elevated as more sophisticated measurements and ROI determinations are becoming more standard practice. A key driver for human resources to help drive an impact for a business is correlating programs and processes to financial results, such that insights won by HR can contribute to the overall commercial success of an organization. Here is one example that illustrates this point.
HR will be involved in securing new talent or recruiting. The cost per new hire is a measurement that helps HR determine the most cost-effective way to add talent to the organization, as well as measuring the quality of hire. Employee retention has become a more significant role today because of the cost of employee turnover which shows that replacement costs for employees can average five to six times the annual cost of the position lost. HR must develop programs that help develop employees, providing clear career paths, and employee rewards to boost overall employee engagement.
Why human resources needs to be in more proactive position
One of the most significant challenges for HR today is being able to take a more proactive stance in bringing the business to its next level versus a reactive stand. Keeping in mind that all major policies and programs are administered by HR — from recruiting, onboarding, benefits administration, to continuing employee development, managing employee leave, employee exits, department reorgs or company mergers, and any issues requiring employee privacy. Given the multi-faceted and comprehensive responsibilities put upon HR to serve all people in the organization, it may not be all that surprising that HR finds itself operating on a tactical, short-term focus vs. long term workforce planning.
Fortunately, the advent of specialized software to help automated processes for HR within certain areas does help reduce the manual time spent for specific administrative tasks along with talent-based and workforce analytic solutions that help HR in measuring the composition of their workforce and its overall effectiveness. With HR being able to drive informed business decisions across the organization with management, this helps strengthen the position of HR. You might even say this has elevated it to being the most vital part of the organization reporting to the CEO and CFO. HR is the one field that has the most significant direct impact and influence on employees across the organization.
The most important areas of interest for human resource management today
Today’s HR management team must focus on the following key areas, consistent with the shortage of talent in today’s hyper competitive global environment:
- Ensure the company culture aligns with the overall strategic goals of the organization, and each employee understands how they contribute to the corporate culture and can have a positive impact on driving high performance.
- Recruit and retain the best talent. HR must think outside the box on how to recruit the best talent that can be developed and maintained over time. High employee turnover comes at a high cost to a company, and the ability to hire and retain top talent begins with a best practice approach to employee recruitment and onboarding. An emerging challenge for HR is the aging workforce and the ability to develop new talent.
- To grow talent, HR must focus on programs that will encourage employee engagement and development, such as mentoring programs, job sharing, job transfers, leadership councils, job training and development, and clearly articulated career paths.
- Programs and policies need to be executed in a timely and consistent fashion so that the employee knows they are fully supported and understood. A lack of programs or engagement by HR towards the staff, particularly when any issues may arise, can prove quite costly and hurt employee morale. Furthermore, HR must be able to measure and quantify program costs and ROI to understand how to more effectively and efficiently achieve results.
- Establish and nourish an inclusive, positive community. HR must help employees find ways to contribute and find meaning in their roles such that they feel they are actively contributing and being recognized for their contributions. Organizations want to avoid disengaged employees who feel they are not accepted for their strengths or given opportunities to grow. The result could be employee turnover of top talent that should be avoided when possible.
In summary, human resource management has developed into one of the most influential and vital aspects of an organization. Many of the positive attributes prescribed to an organization do not only come from the CEO but are generated by the overall company culture and programs that result in attaining and retaining today’s top talent in the marketplace.
How can Ingentis org.manager help in human resource management?
Our org charting software Ingentis org.manager delivers org charts that provide a great overview of an organization’s hierarchy structure. In addition, our software allows you to effectively and automatically track key HR metrics, e.g. visualized in the form of dashboards or big data graphs, that are always up-to-date and based on your system of record. Furthermore, with the built-in security and permissions capabilities you can rest assured your HR data analytics and reports are only distributed to those who are meant to see the respective information. We invite you to speak to us about org charting and what Ingentis org.manager can do for your organization.
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