What’s the secret sauce that fuels your organization’s success? Your employees. The team you have behind the scenes makes or breaks your productivity.
So, how can you maximize their potential? You stay up to date with the latest HR practices, leverage HR software and refine your strategies.
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Implementing core HR functions is crucial to handling everything HR throws your way and ensuring employees stay happy, growing and productive.
Key Takeaways
- HR functions are fundamental in maintaining productivity and employee satisfaction.
- HR aims to attract and retain talent, prioritize employee development, enhance engagement and satisfaction, manage risks, and promote diversity and inclusion.
- By staying updated with HR practices and leveraging technology, you can maximize employee potential and ensure efficient operations.
- Tools such as human resource information systems (HRIS), human resource management systems (HRM) and learning management systems (LMS) help manage employee data, track performance, and support recruitment and development processes.
- Primary HR functions include job analysis and design, hiring and selection, training and development, and succession planning.
Core HR Functions
Now that you know the basics, we can move on to the main course. HR functions are like the instructions for assembling a tricky piece of furniture — they help you build and keep your organization running smoothly.
We can’t talk about HR functions without touching on the profound impact technology and HR software have.
According to our research team, HR software impacts core HR functions by:
- Providing automation tools that save time on tasks like resume screening and interview scheduling.
- Offering valuable data to refine hiring strategies.
- Supporting continuous feedback and goal tracking.
- Enabling real-time feedback with surveys.
- Easing recognition with automated platforms.
- Improving communication with integrated tools (contributing to a more engaged and motivated workforce).
Check out the main functions of HR below!
Human Resource Planning
What it is: Human resource planning is the process of anticipating future workforce needs (primarily staffing) and ensuring you have the right number of employees at the right time.
Why it matters: HR planning helps manage talent, reduces costs and supports strategic decision-making.
Challenge it addresses: Analyzing and planning for your organization’s goals, upcoming projects, workforce needs and market changes can be time-consuming and demanding.
Quick tip: HR planning software provides robust tools to address factors such as globalization, technological advances and legal changes to meet your goals and objectives.
Recruitment and Selection
What it is: Recruitment and selection involve attracting, engaging and choosing the right candidates to drive growth and development.
It starts with creating a robust employer brand that highlights work ethics, culture, diversity and inclusion, and organizational values.
Why it matters: It helps bring in qualified, high-potential candidates who align with company goals and culture.
Challenge it addresses: Recruitment and selection tackle the tough job of finding and hiring great talent in a crowded market with ever-changing job needs. Plus, the hiring process can be lengthy and leave gaps in roles that hinder productivity.
Quick tip: Leveraging recruitment software simplifies sourcing, improves candidate matching and saves time on the recruitment process with automation options like reminders when it’s time to schedule an interview.
Additionally, recruitment software helps promote diversity and inclusion by offering features to reduce bias and broaden candidate outreach. For instance, it can analyze job descriptions to eliminate biased language, employ blind recruitment techniques to mask personal details and mitigate unconscious bias, and integrate with diverse job boards to reach a wider pool of candidates.
Performance Management
What it is: Performance management involves tracking and reviewing how employees are performing and contributing to the organization.
Why it matters: It helps set clear expectations and key result areas (KRAs) while aligning individual training and performance plans with company goals.
Challenge it addresses: Low productivity, unmet organizational objectives, lack of constructive feedback and struggling to find time for performance reviews.
Quick tip: Performance management software typically provides automation options like AI-driven feedback collection and automated goal setting. Most systems also provide 360-degree feedback, giving you a well-rounded view of performance.
Example of goal planning in Leapsome.
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Learning and Development
What it is: Learning and development is the HR function focused on identifying training needs, creating structured training plans and empowering employees to enhance their skills for career advancement.
Why it matters: Investing in learning and development helps employees advance skills, enhance performance and support long-term organizational success.
According to Deloitte’s 2024 Global Human Capital Trends survey,
Organizations that invest in skills development have better business results. Eighty-four percent of workers at high-performing organizations say they receive the training they need to do their jobs well.
Emphasizing training and growth opportunities keeps your team motivated and engaged throughout the employee lifecycle.
Challenge it addresses: Keeping up with evolving job requirements, missing out on training and, as a result, lacking career advancement opportunities that lead to feeling stuck or wanting to quit.
Quick tip: Learning isn’t one size fits all. Using a learning management system lets you tailor learning paths based on their roles, skills and career goals. This not only boosts engagement but also helps in tracking progress effectively.
Course dashboard in an LMS.
Rewards and Recognition
What it is: Rewards and recognition help you take the initiative to appreciate employees for their hard work and achievements. This includes monetary rewards like bonuses, salary increases and performance incentives, as well as non-monetary perks such as extra time off and flexible work arrangements.
Recognition also covers promotions, public accolades, job security and opportunities for career growth. Essentially, it’s about showing employees that their dedication and contributions are valued.
Why it matters: When employees feel appreciated, they’re more engaged and dedicated to their work. This boosts productivity and helps with employee retention.
Challenge it addresses: If employees don’t feel recognized for their efforts, they’re more likely to feel burnout, lose motivation and look for opportunities elsewhere.
Quick tip: HR systems come with features to automate tracking, customize rewards and ease communication. This makes it easier to ensure recognition is prompt and meaningful, helping maintain a motivated and happy team.
Compensation and Benefits
What it is: Compensation and benefits involve setting and managing employee salaries and perks. This includes fixed compensation (like base salary) and variable compensation (such as bonuses or performance incentives). It also encompasses a range of benefits like health insurance, retirement plans and other benefits.
Why it matters: Compensation and benefits are key factors in attracting good candidates and keeping your current team happy.
Challenge it addresses: If salaries and benefits aren’t competitive, employees may seek opportunities elsewhere.
Quick tip: HR platforms offer tools for benchmarking salaries against industry standards, managing benefits administration and tracking compensation changes.
Example of benefits data in an HR solution. Source
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Policy Formulation
What it is: Policy formulation in HR sets up guidelines and procedures. These policies cover everything from how employees should behave and perform to safety rules and compliance.
Why it matters: Well-designed policies are essential to create consistent processes, increase accountability and help manage risks by clearly laying out expectations. They cut down on biases and give employees a clear framework to follow.
Challenge it addresses: Without strong policies, organizations can end up with inconsistent practices and confusion, which can hurt performance, increase rule-breaking and lower morale.
Quick tip: Most HR platforms have tools for drafting, distributing and tracking policies.
Employee Engagement
What it is: Employee engagement measures how committed and enthusiastic employees are about their work and their organization. It reflects their level of dedication, motivation and emotional investment in their job roles.
Why it matters: Everyone Social explains,
Generally, employee engagement tends to matter most at the company level because of the impact it has on business operations and profitability. But it also helps leaders understand employee needs, as well as identify ways to improve morale and create better work environments.
Challenge it addresses: When employees are disengaged, they tend to lose motivation and enthusiasm, which can result in lower productivity and missed deadlines.
Quick tip: If you’re struggling to improve employee engagement, features like surveys and feedback tools help you gauge how engaged your team is and areas that need attention, making it easier to create a plan.
Growth and Succession Planning
What it is: Growth and succession planning involves creating development paths for employees and preparing for key role transitions.
Growth planning helps employees advance their careers, while succession planning ensures you have ready candidates to fill critical roles when they become vacant.
Why it matters: This function is pivotal during transitions. For staff, it shows there’s room for advancement, boosting engagement and retention. It also helps avoid productivity bottlenecks by having a plan for filling important roles.
Challenge it addresses: Sudden employee departures increase the risk of operational disruptions.
The HR Party of One podcast touches on this concept in How to Navigate the Unexpected Exit of a Senior Leader:
We all know that there are times when the worst case scenario is your reality. In 2023, a venture partner firm called OpenView suspended operations and laid off half its staff, including all vice presidents after two senior leaders left unexpectedly.
We don’t know if their HR team had a plan in place for their exit or how much they knew beforehand. What we do know is that whatever was in place was insufficient to avoid laying off their workforce.
Quick tip: Learning management systems provide access to courses, progress tracking and certifications management. Additionally, performance management systems help set goals.
Plus, there are some great HR tools out there that can help you spot key roles, map out potential successors and track development plans. This capability can cut down disruptions that come with sudden employee departures.
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Function Evaluation
What it is: Function evaluation involves assessing the performance and impact of various departments or units within an organization.
This process includes defining performance metrics and key performance indicators (KPIs), analyzing data, and providing feedback.
Why it matters: It’s key for smart resource allocation and decision-making. It helps pinpoint which departments are thriving and which ones might need extra help or a bit of a shake-up.
Challenge it addresses: Inefficient use of resources or misallocation leads to reactive instead of strategic planning. When this happens, plans lack a long-term vision or clear objective, overlook potential opportunities for innovation and create a more high-pressure work environment.
Quick tip: According to our research team, many systems struggle with real-time reporting because they can’t process and integrate data quickly enough, causing delays. Plus, built-in reporting tools often lack flexibility and advanced features, making detailed, customized reports tough to create.
The solution? Use advanced analytical software for better performance dashboards and automated reporting to quickly interpret performance metrics and KPIs.
Industrial Relations
What it is: Industrial relations is a critical HR function focused on managing and improving the relationship between employers and employees.
Why it matters: It helps create and maintain a harmonious and productive work environment.
Challenge it addresses: Mishandled conflicts put you at risk of legal issues and create a negative work environment.
Quick tip: Industrial relations software helps with grievance management and dispute resolution processes.
Labor Law Compliance
What it is: Labor law compliance means making sure your business follows all legal requirements and regulations related to employment and labor practices, from local to federal levels.
Why it matters: It’s essential for avoiding legal risks, fines and reputational damage.
For example, Amazon was recently hit with a $5.9 million fine for violating labor laws in California.
Challenge it addresses: According to our research team, one major challenge is staying compliant with evolving labor laws and regulations.
Some additional challenges include accurately recording working hours, managing overtime, meeting minimum wage requirements and ensuring workplace safety.
Quick tip: Look for HR software with integrated timekeeping systems that provide real-time tracking and automated alerts for overtime.
Additionally, software with compliance reporting features can monitor and document workplace safety practices, ensuring adherence to legal standards. Some options also notify you when there are updates to laws and regulations.
Job Evaluation
What it is: Job evaluation is the systematic process of assessing and determining the relative value of various jobs within an organization. This process helps establish fair and equitable compensation structures and ensures internal pay equity by evaluating job factors such as skills, responsibilities, qualifications, and experience.
Why it matters: Job evaluation is crucial for creating fair compensation packages, attracting and retaining talent, and aligning job roles with performance expectations. It supports transparency, employee engagement and equity within the organization.
Challenge it addresses: Setting competitive compensation that aligns with job responsibilities and internal equity. Also, jobs evolve and keeping evaluation criteria up-to-date to reflect these changes can be difficult.
Quick tip: Leverage job evaluation software to streamline the assessment process. These tools can automate data collection and analysis, making it easier to apply consistent evaluation criteria and identify pay discrepancies, supporting fair and transparent compensation practices.
Infor Scorecard.
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Health, Safety and Risk Management
Health and Safety
What it is: Health and safety involves implementing and managing policies and practices to protect employees’ physical and mental well-being. This includes compliance with safety regulations, providing health insurance, conducting safety training, establishing harassment policies and offering health initiatives.
Why it matters: An article posted by the Harvard Business Review writes,
By making worker safety central to a firm’s operations, not only are lives saved and injuries prevented, but there is a greater commitment among the entire workforce, from the CEO down to the shop floor, to achieving operational excellence.
Challenge it addresses: Without proper measures in place, employees might experience physical injuries or mental stress, which can lead to more absences and potential lawsuits or fines.
Quick tip: Software like risk management tools, compliance management systems, and health and wellness apps further enhance safety management and simplify audit processes.
Risk Management
What it is: Risk management involves identifying, assessing, and mitigating potential risks and liabilities, including compliance with employment laws, workplace safety, and data security.
Why it matters: It protects your business from legal and financial repercussions and ensures regulatory compliance.
Challenge it addresses: Data breaches and complex and frequently changing regulatory requirements.
Quick tip: Enlisting the help of risk management software tracks and analyzes potential risks in real time.
Administrative Services and Responsibilities
What it is: Administrative services are a range of tasks related to managing employee records and maintaining HR systems.
This includes handling employee onboarding and offboarding, overseeing HR systems, and administering employee benefits programs.
Why it matters: IT helps maintain accurate employee records, ensure compliance with legal requirements, and support effective communication and operations within the HR department.
Challenge it addresses: Managing large volumes of employee data, avoiding data integrity risks and juggling various HR processes.
Quick tip: HR management software can help with automating routine tasks, record-keeping, onboarding and benefits administration.
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Key HR Trends
Staying ahead of the curve isn’t just about attracting and keeping top talent; it also means creating a workplace where everyone thrives. Dive into some of the latest HR trends and see what’s shaking up the industry below.
Generative AI To Predict Workforce Trends
Leveraging advanced AI tools to forecast future workforce needs and trends, helping organizations make data-driven decisions and stay ahead of industry changes.
HR systems and tools enable data-driven decision-making by analyzing workforce trends, identifying skill gaps, and implementing targeted interventions.
Generative AI has its perks and drawbacks. For one, HackingHR explains:
Data privacy and protection has been at the heart of the AI discourse. For HR specifically, it’s important to consider data security when using generative AI. Inputting sensitive company or employee information can be dangerous, especially with the risk of a data breach.
ChatGPT prompt example. Source
Employee-Centric Experience
Creating more engaging and personalized experiences for each worker, ensuring that their unique needs and preferences are addressed for better satisfaction and retention.
HR professionals are increasingly prioritizing employee engagement and well-being by fostering a positive work culture, supporting development and promoting work-life balance.
Continuous Learning
Emphasizing the importance of ongoing education and development opportunities to keep employees’ skills sharp and aligned with evolving industry standards.
Reskilling and Upskilling
Investing in training programs to help employees acquire new skills and enhance existing ones, ensuring they can adapt to changing job requirements and advance in their careers.
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Application of HR Analytics
Organizations invest a lot in their employees through benefits, compensation, office space, training and advanced technology. HR managers use HR analytics to optimize resource allocation and enhance productivity and growth.
So, what is HR analytics? It involves analyzing data on headcount, compensation, roles, locations, onboarding, turnover and development. This data is gathered from sources like employee surveys, HRIS, human resource management systems, applicant tracking systems (ATS) and talent management systems.
Using these insights helps allocate resources, monitor performance and improve employee engagement to reduce turnover and foster a productive workforce.
Now, let’s look at how HR analytics play a vital role in carrying out HR functions.
Measure Performance
Organizations use analytical tools to set performance goals and keep an eye on progress. By using quantitative performance assessment methods and tracking key performance indicators (KPIs), you can set clear benchmarks and evaluate how well employees are doing.
With the right performance measurement tools and performance analysis techniques, it’s easier to boost overall performance, improve productivity and stay ahead of the competition.
In short, measuring performance helps get the most out of teams and achieve goals.
Evaluate Promotions and Salary Decisions
Taking a data-based approach helps HR leaders and managers get a clear picture of promotions and salary decisions. They can understand how quickly employees are getting promoted, what factors are driving those advancements and raises, how frequently these changes occur, which performance metrics matter most, and the best timing for evaluating performance.
Robust data can also feed artificial intelligence and machine learning algorithms to develop models that ensure less bias in promotions and salary decisions.
Predict Attrition and Increase Retention
Performance-based analytics help users predict and determine factors contributing to attrition.
Some factors that lead to attrition are:
- Limited career growth
- Toxic work culture
- Incompetent managers
- Lack of training
- No development opportunities
You can leverage AI-based predictive analytics to determine the turnover rate and understand attrition trends.
For example, if there’s a sudden increase in people leaving the company against their will, it might mean there are issues with the recruitment or training processes that need fixing right away. On the other hand, if more employees are leaving voluntarily, it could be a sign that they’re dealing with bad managers or a toxic work environment.
Examine Employee Engagement
Employee engagement data usually comes from surveys conducted by external service providers. But lots of companies handle this themselves to get quicker results and keep control of their data.
For example, in-house HR teams might use quick surveys to keep tabs on how engaged employees are and then dig into the insights they get from tools like AI-powered engagement platforms or employee feedback apps.
These tools can offer real-time updates and detailed analysis, making it easier to spot trends and take action quickly.
Measure Learning and Development Outcomes
Strong training programs pay off by boosting productivity, increasing engagement and encouraging employees to stick around longer. Most companies use talent management solutions to cater to learning and development needs.
So, what’s the best way to measure learning and development?
Here are a few methods to try:
- Performance reviews to determine each employee’s training requirements and chart out a customized growth plan.
- Periodic reviews to gauge the employees’ long-term goals and how the organization can contribute.
- Predictive analytics capabilities to tailor training content to individual learning styles.
Predictive analytics can assess metrics like:
- Number of employees who completed training
- Completion duration
- Badges and certificates
It can also identify shortcomings in training programs and guide team members in updating the content accordingly.
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Tips for Better HR Practices
Effective HR practices are essential for creating a positive work environment, fostering employee engagement, and supporting your business’s success.
Here are some tips for better HR practices:
- Prioritize Communication: Keep lines of communication clear and open. Make sure everyone knows the HR policies and listen to their feedback and concerns.
- Embrace Tech: Use HR software to simplify tasks like hiring, managing performance and keeping records. It saves time, cuts down on mistakes and boosts efficiency.
- Invest in Development: Offer training and growth opportunities to help employees build their skills. Think workshops, online courses and mentorship programs.
- Build a Positive Culture: Create a work environment where teamwork and respect thrive. Promote work-life balance, celebrate achievements, and foster inclusivity to boost satisfaction and productivity.
- Review Policies Regularly: Keep up with changing laws and frequently check your HR policies. Do audits to spot improvements and make sure everything’s up to date with best practices and legal standards.
FAQs
Here are the main types:
- Human Resource Information Systems (HRIS): Focus on managing and storing employee data, such as personal details, employment history, and payroll information. They are essential for maintaining accurate records and generating reports.
- Human Resource Management Systems (HRM): Broader than HRIS, HRM software includes additional features for managing employee performance, recruitment, training and development. It provides a comprehensive suite of tools to support various HR functions.
- Payroll Systems: Specialized in handling payroll processing, including calculating wages, managing deductions and ensuring compliance with tax regulations. They often integrate with other HR systems for seamless data flow.
- Applicant Tracking Systems (ATS): Focus on the recruitment process, helping HR teams manage job postings, track applications and streamline the hiring process from initial application to onboarding.
- Performance Management Systems: Designed to track and evaluate employee performance, set goals, and manage performance reviews. These systems help with feedback, appraisals and development planning.
- Learning Management Systems (LMS): Provide tools for training and development, including course management, tracking employee progress, and delivering learning content.
- Time and Attendance Systems: Track employee hours, manage attendance and handle scheduling. These systems help with accurate timekeeping and ensure compliance with labor laws.
Wondering the difference between the types of HR? Check out our article on HCM vs. HRIS vs. HRMS.
Yes, there are some free HR software options like Deel HR and Orange HRM.
Here are some functions commonly outsourced:
- Accounting and Finance: Encompasses bookkeeping, tax preparation, financial reporting and auditing.
- IT Services: Covers IT support, network management, cybersecurity and software development.
- Customer Service: Involves call centers, help desks and technical support.
- Marketing: Includes social media management, digital advertising, content creation and SEO.
- Legal Services: Encompasses contract drafting, legal research and compliance management.
- Supply Chain Management: Involves logistics, procurement and inventory management.
Determining which HR functions to prioritize involves assessing the organization’s current needs, goals and challenges. Start by conducting a thorough needs assessment through employee surveys, performance metrics and feedback from management.
Identify areas where there are gaps or inefficiencies, such as high turnover rates or low employee engagement. Align HR priorities with the organization’s strategic goals, such as improving talent acquisition to support growth or enhancing employee development to drive innovation.
Regularly review and adjust priorities based on changing business needs and external factors, ensuring that HR initiatives remain relevant and impactful.
Measuring the effectiveness of core HR functions involves using a combination of qualitative and quantitative metrics. Key performance indicators (KPIs) such as employee turnover rates, time-to-fill positions and employee satisfaction scores provide concrete data on HR performance.
Conduct regular employee surveys and feedback sessions to gauge satisfaction and identify areas for improvement. Track the success of training and development programs through performance improvements and career progression.
Additionally, you can use benchmarking to compare HR metrics against industry standards and best practices.
Regularly review these metrics and adjust HR strategies accordingly to enhance effectiveness and align with organizational goals.
Core HR functions affect employee satisfaction by:
- Creating a structured and supportive work environment.
- Ensuring new hires are well-integrated and aligned with organizational culture.
- Reducing early turnover and increasing job satisfaction with effective recruitment and onboarding practices.
- Providing employees with clear expectations and feedback.
- Meeting competitive compensation and benefits.
Together, these functions contribute to a sense of fairness, support and recognition, all of which enhance overall employee satisfaction.
Recruitment and staffing includes:
- Job Analysis and Design: Creating job descriptions and specifications.
- Sourcing Candidates: Using job boards, social media and recruitment agencies to find potential employees.
- Interviewing and Selection: Conducting interviews, assessments and background checks.
- Hiring and Onboarding: Extending job offers, completing paperwork and integrating new hires into the organization.
Generally, HR compliance involves:
- Labor Law Adherence: Ensuring the organization complies with local, state and federal labor laws.
- Health and Safety Regulations: Implementing safety protocols and practices to protect employees.
- Equal Employment Opportunity: Promoting diversity and preventing discrimination in the workplace.
Artificial intelligence (AI) has become a game changer in the world of HR, specifically with core HR functions, enhancing efficiency and effectiveness across various HR tasks. Here’s how AI is making an impact:
- Recruitment and Staffing: AI-powered tools streamline the hiring process by automating resume screening, identifying the best candidates through predictive analytics, and even conducting initial video interviews using natural language processing.
- Performance Management: AI-driven performance management systems analyze employee data to provide insights on performance trends, identify potential issues, and suggest tailored development plans.
- Employee Training and Development: AI enables personalized learning experiences by recommending training programs based on individual employee skills and career goals, as well as tracking progress through adaptive learning platforms.
- Compensation and Benefits Administration: AI helps benchmark compensation packages by analyzing market data, predicting compensation trends and ensuring equitable pay practices.
- HR Compliance: AI assists in monitoring compliance by automating the tracking of labor law changes, ensuring that company policies are up-to-date, and alerting HR teams to potential compliance issues.
HRM aligns human resources with organizational goals, nurtures employee development, fosters a positive work environment, and strategically manages the workforce to enhance performance and productivity.
HRM aligns talent with organizational goals, attracts and selects the right candidates, and ensures they have the skills and cultural fit needed to drive performance.
It focuses on employee training, development, and career growth, fostering a motivated and engaged workforce to boost productivity and job satisfaction.
HRM establishes fair and competitive compensation and benefits systems to support employee satisfaction, retention, and attraction of top talent.
It manages employee relations, handles grievances, and implements wellness programs, promoting a positive work culture, work-life balance, and inclusivity.
HRM engages in strategic workforce planning by forecasting talent needs, identifying skill gaps, and aligning HR strategies with business goals to support organizational growth and adaptability.
According to our research team, a strategic and methodical approach is best.
Conducting a needs assessment is a great first step in identifying your specific challenges and opportunities that technology can help with.
Another essential consideration is the type of integration. A real-time bidirectional API-based integration isn’t always needed. Sometimes, a simple SFTP-based automated export-import type of integration can suit your needs and be cost-efficient.
Creating a change management plan can help ensure a smooth transition, including clear communication, training and support for your team. Run performance tests and do end-to-end user acceptance testing to see how well integrations work from start to finish. Lastly, providing ongoing maintenance support and continuous integration monitoring helps ensure the software meets your initial objectives and desired improvements.
For simple integrations, building and maintaining custom solutions might be enough, but for more complex integrations, enterprise middleware software could be a better option.
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Next Steps
Just like how Taylor Swift relies on her team to set up before a concert, human resource functions are the behind-the-scenes crew that keeps everything running smoothly.
From talent acquisition and employee development to employee relations and compliance management, HR professionals are crucial to maximizing the potential of your most valuable asset — people.
By embracing effective HR practices, you can improve decision-making, attract and retain top talent, promote employee engagement, and ensure legal compliance every step of the way.
Multiple HR functions can take a toll on your HR team. If you’re considering HR software to take the mundane workload off your HR department, our free comparative HR guide is a great first step for your search!
Did we miss any key HR functions? Please let us know in the comments section below!