How is Human Resource Management Beneficial to Business Growth?

Understanding the fundamental functions of human resource management from the outset can significantly improve the likelihood of success for businesses.

Fremont, CA: Human resource management can seem overwhelming for small businesses. Here are six practical tips to help your small business begin managing HR effectively.

Human Resources (HR) is what we all know, but do we really know what it does? Or more to the point, what it should be doing?

Many small businesses are overwhelmed by human resources or human capital management complexities. It is difficult to know when and how to introduce new aspects of human resource management. Even more difficult is to know how to make their implementation successful. However, they know human resources management is important, whether they have one or 100 employees.

This guide to human resource management will help small businesses understand the role of HR and how to succeed within it.

A brief introduction to human resources management

Human resources management refers to the processes, practices, and policies of a business's human resources department that govern and manage employees.

A human resource manager's goal is to make the most of employees to achieve business goals and objectives and to manage the relationship between the business and its employees.

It covers everything from recruitment and hiring to compensation and employee relations.

What are the key functions of human resource management?

Your business stands a better chance of success if you understand the core functions of human resource management early on. Let's look at the key HR management functions.

The human resource planning process

In order to do this, you need to make sure your business has enough employees -- and the right people -- to meet the demands of your business today and in the near future. In the early days of a business, human resource planning, sometimes called workforce planning, is particularly important.

It is critical to define the skills and roles they will need to scale up, and how they will fill these roles.

Recruitment, hiring, and onboarding

Human resource management includes strategies for attracting, selecting, and onboarding candidates and contractors for the business. HR is responsible for the entire talent management process, starting from the moment a candidate applies or is sourced to the day they are onboarded.

Compensation and benefits management

The HR management of your organization conducts research to determine what compensation and benefits your employees are entitled to -- both those required by law and those you offer.

It includes bonuses, overtime pay, recognition rewards, and sales commissions. In the absence of a competitive compensation and benefits package, you'll find it difficult to attract and retain talented and loyal employees.

Employee relations and corporate policy management

In addition, HR has a bit of a police and peacekeeping role. In managing employee relations, employers not only create policies regarding compensation, working hours, conduct codes, etc. but are also responsible for enforcing those policies.

Additionally, the HR department is responsible for preventing and resolving workplace disputes.