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What is Human Resources Management?

Human Resources Management is the function of managing people and maximizing employee performance. Includes strategies, policies, and systems.

Human Resources Management is a primary component of business operations with both administrative responsibilities and strategic significance. Traditionally, HR management focused on keeping workers productive and protecting a business from penalties and lawsuits. Increasingly, HR Management also means aligning labor—which is often a company’s largest expense—with the larger strategic goals of the business.

HR management can comprise:

  • Recruitment
  • Onboarding
  • Compensation
  • Retention
  • Employee engagement
  • Employee development
  • Succession planning
  • Benefits
  • Payroll
  • Payroll tax filing
  • Time-tracking
  • Record-keeping
  • Labor law compliance
  • Internal communication
  • Internal processes
  • Employee/employer relations
  • Workplace safety

In larger companies, there may be departments dedicated to combinations of these areas. In smaller companies, these areas may be overseen by the business owner, an individual dedicated to HR, or a small team. Many companies opt to outsource some of these functions, such as payroll. Companies can also outsource many of these functions through HR Business Process Outsourcing (HR BPO). One common example of HR BPO is a Professional Employer Organization (PEO), in which a vendor takes on many administrative HR responsibilities, as well as certain aspects of employer risk.

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