The Role of Human Resource Management in Business

By Divyesh Nathoo

Human resource management (HRM) is one of the vital functions of any business, along with general management, operations, finance, purchasing, marketing, administration and public relations. It doesn't matter what type of business is carried out, or what form of enterprise the business is, there always will be HRM activities.

In very small businesses, it is often the business owner or the employed manager of the business who undertakes the HRM function; but if there are at least 50 employees in the business, there will usually be a dedicated HR division.

Unfortunately too many small business owners negate the importance of HR, and in many instances decisions regarding employees are made that have adverse long-term consequences for both employees and the business.

What HR Managers Do

Everything that any human resources manager does relates to people - the human resources of the business. Specifically, HR managers are involved in the employment process, as well as training - and unfortunately firing. They will usually:

• oversee selection interviews for new staff,
• be in charge of induction and training,
• evaluate the performance of employees down the line,
• handle grievances of staff and the employer,
• generally handle labour relations in every possible form.

In addition, the human resource management team, or manager (if only one person is involved), has a vital role in terms of planning, to ensure that the business always has the right skills available from those people who are employed. If the overall skills of staff are not managed, it is extremely difficult to ensure long-term productivity and organisational continuity.

In real terms, HRM must ensure that the business can continue to operate on an ongoing basis, without any adverse affect if any one person leaves suddenly, or becomes ill - or somebody goes on leave. This often means additional training for some people in the business, so that they can embrace different jobs when necessary. It also entails organising training and development for people who are selected for future promotions.

Human Resource Forecasts

Here guesswork is not an option. HR professionals are trained to project, as accurately as possible, what type and number of employees are likely to be required in future months and years. Part of this projection will be based on the vision for the business, and will fit in with its growth program.

While it is possible to do some reasonably simple projections, there are also some quite complicated models that HR professionals use, including regression and correlation models, and balancing equations. Often these rely on outsourcing to fill the gap.

Ultimately, the function of human resource management is to recruit, select and employ suitable people for jobs within the business and to develop and train new staff members, as well as further educate those who are already working within the business.

Divyesh Nathoo is the General Manager of Twin Consulting, a firm that helps Australian businesses minimise risk and maximise growth through compliant human resource systems.
Twin Consulting offers businesses comprehensive auditing of their HR systems and procedures and assists organisations structure their Human Resource Framework. With Industry leading benchmarking tools, Twin Consulting develops strategic HR compliance plans that provide businesses and organisations with a vehicle to link strategy to activity. Get your free copy of Divyesh's highly popular ebook: Managing Back to Certainty with HR Management