The difference between productive and inefficient workplaces comes down to one thing — human resource management. Without properly managing employees, your business could fall apart faster than a house of cards in a field of windmills.

Hiring the right employees is just the beginning. So, what is human resource management? Keep reading to find out! In this article, we’ll go beyond the basics and delve into what makes HRM essential to your organization.

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Article Roadmap:

• What Is Human Resource Management?
• Key Functions
• Objectives
• Importance
• HRM Trends
• How Software Can Support HRM
• How To Choose an HRM Solution
• The Wrap-Up

What Is Human Resource Management?

Human resource management is a strategic approach for employee management, streamlining core tasks and processes like recruiting, training and payroll.

These processes come together to boost employee performance and management styles, leading to better workplace culture.

HRM supports a positive employee working environment by:

• Promoting work-life balance with wellness programs, PTO and hybrid and remote work options.
• Providing conflict resolution to resolve disputes efficiently
• Implementing diversity and inclusion initiatives
• Gathering feedback to foster improvements
• Administering fair and competitive compensation packages

Key Functions

Staffing, training and development, safety, labor regulations and compensation — HR teams have their hands full, overlooking a plethora of tasks to support your work structure. Take a closer look at the key functions below.

Staffing and Recruiting

Staffing is the cornerstone of HRM, encompassing recruitment, negotiating competitive pay and benefits and handling terminations and layoffs.

This key function ensures getting the right person for the job promptly and reducing vacant positions that slow your workflow down.

Training and Development

Learning doesn’t stop after onboarding. Continued learning is great for ensuring professional growth and job satisfaction.

This core HR function can utilize training modules, online courses, learning documents and instructor-led training. Also, implement ongoing training programs to update employees on the latest safety measures and compliance requirements.

Compensation Management

Many elements go into keeping your staff happy at work, but what’s most likely top of the list is compensation. Compensation management takes a systematic and strategic approach to designing, implementing and overseeing monetary and non-monetary rewards for the work your team does.

Additionally, compensation management helps navigate regulatory compliance, ensuring pay structures adhere to state, federal and industry regulations (while preventing potential legal disputes).

This function also includes negotiating insurance rates and retirement plans with third-party providers.

Safety and Compliance

Safety and compliance contribute to the overall well-being of employees and protect your business from legal issues.

This function encompasses developing safety policies and procedures tailored to your industry standards, automating reporting for potential audits and conducting risk assessments.

Conflict Resolution

It can be a running joke that HR workers are on-site therapists, and that’s true in the sense that HR professionals are responsible for actively listening to issues and problem-solving.

Communication breakdowns, stress from burnout and personality clashes are some common causes of workplace conflicts. Here’s how conflict resolution (or conflict management) helps mend or avoid disputes:

Establishing Policies and Procedures: Communicate clear policies on workplace behavior and conflict resolution. For instance, having a documented procedure for reporting conflicts lets employees know where to turn.

Conducting Mediation: Act as a mediator to facilitate communication and find common ground between coworkers.

Providing Training Opportunities: Conduct training programs on communication and conflict management skills. Organize workshops or seminars (online or in-person) focused on constructive communication strategies.

Instilling Employee Assistance Programs (EAPs): Offer counseling services for employees dealing with personal or work-related issues affecting their performance.

Creating an Outlet For Concerns: Suggestion boxes, feedback sessions, town hall meetings (virtual or in-person) and instant messaging platforms give staff members space to express concerns or provide feedback.

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Objectives

Your HRM objectives may vary depending on your company’s specific goals, but generally speaking, here are key objectives:

Strategic Workforce Planning:

• Aligning HR strategies with overall business strategies.
• Ensuring the organization has the right talent and skills to meet future business needs.

Recruitment and Selection:

• Attracting and hiring the most qualified candidates for available positions.
• Ensuring a diverse and inclusive workforce.

Employee Development and Training:

• Enhancing the skills and capabilities of employees.
• Providing opportunities for career growth and advancement.

Performance Management:

• Establishing performance expectations and goals.
• Regularly assess and provide employee performance feedback.

Employee Engagement:

• Fostering a positive work environment.
• Promoting employee satisfaction, motivation, and commitment.

Compensation and Benefits:

• Designing competitive and fair compensation structures.
• Managing employee benefits to attract and retain talent.

Legal Compliance:

• Ensuring that HR practices comply with relevant labor laws and regulations.
• Mitigating legal risks associated with employment practices.

Health and Safety:

• Creating and maintaining a safe and healthy work environment.
• Complying with occupational health and safety regulations.

Succession Planning:

• Identifying and developing potential future leaders within the organization.
• Ensuring a smooth transition of key roles to mitigate talent gaps.

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Importance

Every company, big or small, is looking to grow and boost profits. HRM puts processes in place to enhance talent acquisition, remunerations and benefits while also helping improve your workplace and reducing burnout. Now, let’s take a closer look at why HRM is so important to teams.

Enhancing Talent Acquisition and Retention

From screening resumes and scheduling interviews to onboarding, HRM facilitates a smooth experience for both businesses and candidates.

Talent acquisition also comes with its setbacks, like the skills gap — a shortage of qualified workers that increases demands for high-skilled jobs. Another prevalent issue is the shortage of skills in potential candidates. Overcoming these challenges requires a robust and efficient system for managing personnel.

Putting effective HRM in place overcomes challenges like these through strategic planning and remedies like:

• Investing in employee training programs.
• Onsite training provisions.
• Diverse talent pools for recruiting.
• Enhancing retention efforts.
• Collaborating with educational institutions for fresh talent.

Improving Workplace Culture

Elevate your workplace environment and culture by incorporating tech innovations, physical space design, modern leadership styles, and collaborative work practices.

Tips for creating a positive workplace culture include:

• Provide work-life balance through flexible scheduling, wellness programs and clear PTO policies.
• Encourage one-on-one interactions.
• Actively seek and implement employee feedback.
• Promote diversity and inclusivity.
• Implement a comprehensive employee recognition program.
• Provide employee development opportunities.
• Take time to celebrate team wins, department milestones and individual achievements.

So, what is company culture exactly?

Culture Amp writes:

Company culture is a shared set of values, attitudes, and practices that characterize how an organization operates both internally and externally. Every company has different goals, expectations, and norms – and culture describes how the company goes about setting and achieving these. In a sense, culture can be thought of as the “personality” of an organization. Internally, Culture Amp defines culture as how we work – together.”

Remember, a positive work environment goes beyond hiring the right people and focuses on retaining them for the long term.

Managing Compensation

Compensation and remuneration foster fair pay leading to better employee retention. Aside from earning money, employees have access to a spectrum of additional benefits like life insurance, health insurance and retirement plans.

We can’t talk about compensation without touching on the payroll buzzword: pay transparency. Pay transparency is the level of how open your workplace is about providing info on compensation structures like salaries and bonuses.

It focuses on making compensation details open and accessible for employees. Establishing a transparent pay system enables employees to better understand how the company determines pay structures and build trust.

Does pay transparency mean the same thing as pay equity? According to HR vendor ADP:

No, pay transparency is not the same thing as pay equity. But they are connected. Pay equity refers to the principle of equal pay for equal work. This standard was initially legislated in the Equal Pay Act of 1963. Moreover, pay equity refers to compensation practices that are fair, unbiased, ethical, and free from discrimination. Pay transparency is likely to be an excellent motivator for companies to practice equitable pay. Interestingly, the fact that pay equity has been federally legislated for over 60 years has not meant that companies have always been committed to equitable pay practices (or following the law). Most labor economists still calculate a pay gap between genders and other protected groups. This gap is most likely why states are stepping in to legislate pay transparency — and, in effect — enforce pay equity.”

Employee Development and Engagement

HRM helps create and implement comprehensive training programs for building skills and uncovering leadership opportunities among your staff. Continuous learning contributes to employee growth and bolsters job satisfaction, letting your employees know that onboarding is just the beginning and they have chances to advance.

In addition to training, HRM establishes performance management systems, ensuring regular feedback for insights into individual strengths and areas for improvement. By aligning individual career aspirations with organizational objectives, HRM further elevates employee engagement and commitment, creating a mutually beneficial dynamic.

What’s 360-degree feedback? The podcast, HR Party of One, explains:

360-degree feedback provides useful info on how a team member interacts with the individuals in their organization from every direction, direct reports, colleagues, supervisors and even themselves. This type of feedback focuses on behavior, not performance, providing info on communication style, attitude and more through survey results and self-reflection.”

Navigating Compliance

Running a business means keeping up with local, federal, and state labor laws. To avoid audits and lawsuits, it’s critical to monitor changing regulations regarding pay, benefits, and workforce health and safety.

HRM encompasses:

• Employment Laws: Ensure compliance with local, state and federal employment laws related to minimum wage, working hours and overtime.
• Occupational Safety and Health Administration (OSHA) Compliance: Adhere to safety regulations by implementing safety training programs, conducting regular inspections and maintaining necessary documentation.
• General Data Protection Regulation (GDPR) Compliance: Manage employee data and ensure data protection by implementing security measures, getting real-time alerts to suspicious activity and having resources on how to respond to data breaches.
• Compliance Training: Facilitate training programs to educate employees about compliance requirements. Cover topics like anti-harassment training, ethics and code of conduct.

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HRM Trends

As your business grows, your workforce will change and human resource management is evolving to keep up. It’s important to stay in the loop with HRM trends. Here’s a look at some key trends to keep in mind to ensure your company maintains a competitive edge:

Improving the Employee Experience by Prioritizing Company Culture

Negative work environments cause low morale, low productivity and high turnover. More organizations are recognizing the impact of a positive and inclusive work environment and taking initiatives to ensure happier employees.

Help promote a strong company culture by:

• Defining your company’s identity, core values and principles.
• Providing a platform for open communication.
• Giving learning and development opportunities.
• Acknowledging and celebrating employee achievements and team milestones.
• Prioritizing inclusivity and diversity where individuals from different backgrounds, experiences, and perspectives feel welcome.

What is the impact of company culture on workplace harmony? Gallup explains:

Organizations gain momentum when their employees are aligned — moving in the same direction toward the same goal. This momentum allows them to deliver a seamless, differentiated customer experience while creating a compelling employee experience.

“Alignment means that everyone — from current and prospective employees and customers to shareholders, industry influencers and members of the media — thinks and talks about the company in the same way. It also allows the company culture to provide direction for leaders, managers and individual contributors, clarifying how to prioritize their time, energy and resources.”

Ensuring Adaptability by Reskilling Your Staff

As tech keeps pushing ahead, the demand for employee know-how also changes. Providing continuous learning opportunities and resources for updating skills helps you and your employees adapt.

• Invest in training programs and online courses (Platforms like LinkedIn Learning, Coursera, or Skillshare offer a plethora of courses to help employees upskill at their own pace).
• Put mentorship initiatives in place (this can include workshops, webinars, or hands-on sessions)
• Encourage peer learning (sometimes, the best way to learn is from a colleague).
• Make learning fun with challenges and rewards.
• Recognize and reward achievements to keep employees motivated.

Workplace learning ensures your company is structured like a ladder for employees to climb, instead of a game of freeze tag where they feel stuck in one spot. Reskilling and training also ignite a growth mindset that’s better for your business by prepping your team for changes.

What’s a growth mindset vs. a fixed mindset? Entrepreneur explains:

There are two primary types of mindsets; growth and fixed. Individuals with a fixed mindset have difficulty seeing past their current responsibilities or even six months into the future. When change occurs, they can become paralyzed, unsure of how to respond.

“In contrast, someone with a growth mindset always looks for a new learning opportunity. They believe in themselves, and their confidence shows. They’re willing to experiment even if their efforts aren’t always successful.”

Reducing Your Workload With Chatbots

AI-driven chatbots are reshaping the way organizations interact with their workforce and streamlining core processes.

Here’s how:

• Responding to FAQs: Chatbots can provide quick and accurate responses to frequently asked HR inquiries, reducing the burden on HR admins. These common questions and answers include policy inquiries, leave balances and benefits information.
• Supporting Employee Onboarding: Chatbots streamline the onboarding process by guiding new hires through the necessary paperwork and explaining company policies.
• Scheduling and Managing Calendars: Chatbots can schedule interviews, meetings, or training sessions.
• Performance Feedback and Surveys: Collect employee feedback and conduct surveys to gauge job satisfaction, engagement and insights on specific HR initiatives.
• Job Application and Recruitment Assistance: Chatbots can interact with potential candidates during the recruitment process. They can assist in the initial stages of the application process by answering job opening questions and even conducting pre-screening interviews.

How can HR professionals use chatbots responsibly while still maintaining a human touch? HR specialist Sahana Rao advises:

Leverage AI chatbot for routine and transactional tasks, allowing HR professionals to focus on more complex, crisis borne or emotionally sensitive matters. Maintain a human touch in areas that require empathy, emotional intelligence, intuition, judgement and understanding, such as employee counselling, conflict resolution, performance feedback and career development discussions.

“AI may not fully capture the intricacies of such scenarios, emphasizing the need for human involvement. Thus, HR professional can create a balanced approach that maximizes the benefits of both technological advancements and human expertise in employee relations. “

For additional info on the changing HR industry, check out our full HR trends breakdown!

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How Software Can Support HRM

Say goodbye to outdated paper-based HR processes and repetitive tasks by introducing new HR management software into your organization.

Leveraging an HR management solution streamlines talent management, payroll, time and attendance, expense reporting, compliance and benefits administration (just to name a few).

HRM software key features include:

• Applicant Tracking System (ATS): Streamlines the recruitment process by automating job postings, candidate screening, and interview scheduling.
• Performance Management Tools: Facilitate goal setting, performance reviews, and continuous feedback to enhance employee performance.
• Employee Self-Service Portals: Empower employees to access and manage their HR information, reducing administrative workload.
• Learning Management Systems (LMS): Support employee training and development with features like online courses, certifications, and skill tracking.
• Analytics and Reporting: Provide actionable insights through data-driven reports on key HR metrics.

HRM Software Types

Human Resource Information Systems (HRIS): Focuses on managing and storing data and includes functionalities like payroll, benefits administration, performance management and employee record management.

Example: Zenefits

Human Resource Management Systems (HRMS): Integrates HRIS features with additional modules for more comprehensive HR management, covering job acquisition and onboarding, performance management and reporting for workforce planning.

Example: Kronos Workforce Ready

Human Capital Management (HCM) Solutions: Takes a broader approach beyond HRMS, incorporating talent management and strategic workforce planning.

Example: Workday HCM

How To Choose an HRM Solution

Optimizing your workforce management starts with finding the best HRM software. Here’s our step-by-step guide to streamline your search.

Define Your Requirements

• List specific HR needs, like payroll processing capabilities, employee data management, recruitment and performance tools.
• Keep scalability in mind to ensure your HRM solution adapts as your business grows.
• Ensure the HRMS integrates with existing software like accounting and CRM.
• Verify that the HRMS complies with relevant labor laws and industry regulations and check for security features to protect sensitive employee data.
• Confirm that the HRMS offers mobile functionality to facilitate remote access and on-the-go HR tasks.

Key questions: What’s your current HR method missing? What are obstacles you’re facing that a new HRM software would help solve?

Assess Usability

• Ease the process of adapting to new software by prioritizing systems with an intuitive interface.
• Look for customizable dashboards and workflows to tailor platforms to your organization’s needs and preferences.

Key questions: How much time can you provide for employee training? If there’s a steep learning curve, how can you support your staff during the transition?

Scope Out Vendor Reputation and Support

• Research and assess the vendor’s reputation using references, reviews and industry guides.
• Inquire about the level of customer support, including response times and available support channels.

Key questions: Does the vendor have experience in your industry? Has the vendor worked with companies your size before? Does training and support align with the needs of your staff?

Evaluate the Cost

• Compare pricing structures, considering initial setup costs, licensing fees and ongoing maintenance costs.
• Factor in potential scalability costs.

Key questions: Are there additional fees? What’s the total cost of ownership (TCO)? What’s the projected return on investment (ROI)?

Consider Updates and Maintenance Overtime

• Inquire about the vendor’s roadmap for future updates and innovations.
• Evaluate the vendor’s track record in releasing updates and patches promptly to address any security vulnerabilities or performance issues.
• Assess how seamless the update process is.
• Research the level of support and training provided by the vendor during the update process.

Key questions: Does the HRM solution stay current with technological advancements for long-term viability? What new features or functionalities are in recent updates? Is there a cost associated with updates? How frequent are updates?

For more support during your HR software search, check out our best HR solutions.

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The Wrap-Up

Human resource management builds a connection between management and employees that’s crucial for enhancing retention, gauging job satisfaction and securing a positive work environment.

Now that you know the benefits, upcoming trends and core functions of HRM, you’re ready to lead your team with confidence.

How will your company embrace human resource management processes to adapt? What positive outcomes or challenges have you experienced? Let us know in the comments below!

Contributing SME