What exactly is Human Resources, or HR?
Human Resources is a company's personnel management or personnel department. The term Human Resources is spreading further and further in German-speaking countries, because of the criticism that “personnel management” treats a company's staff as a tool. Human Resources, by contrast, focuses on seeing employees as a resource that the company should actively invest in.
Human Resources is responsible for managing the employee life cycle. That includes application processes and hiring new staff, but also their ongoing well-being in the company.
What are the tasks of Human Resources?
In principle, Human Resources deals with the unpleasant aspects of work – or so you might think. It is responsible for breaches of the code of conduct and carries out dismissals and terminations. But that is only a small part of what HR really does. Its main task is supporting employees – it is a department for the people.
In concrete terms, HR deals with the following areas:
Recruiting
One major task of HR is recruiting new employees. HR not only makes sure that job ads are placed where they reach a lot of people, but also that the requirements are communicated correctly and that the budget stays in view. Selecting the right candidates can take a comparatively large amount of time and therefore become expensive. HR carries a lot of responsibility in this process: the right candidate can revitalise the entire company, while the wrong one risks bringing the business to a standstill.
Part of this process is therefore also organising interviews, coordinating recruitment procedures and finally hiring and onboarding new employees, but especially also bureaucratic processes such as coordinating important documents during the hiring process.
Pay & salary
The most bureaucratically demanding and, above all, the most complex task of HR is payroll. HR is responsible for making sure that all the important data is available and processed on payday. That includes reimbursing expenses and processing pay rises and bonuses, but also quite simply making sure that all timesheets are filled in, that those hours are calculated and that vacation days are organised.
Disciplinary proceedings
Probably the most unpleasant topic when it comes to HR: disciplinary proceedings. Here, too, the responsibility for carrying them out lies with HR. Handled appropriately, however, they can have a very positive effect on the team.
A very simple example is maintaining fairness in the team and supporting staff in particular areas. For people who regularly arrive late at work or to appointments, HR can offer counselling services to support them. If that works, it prevents employees from having to be let go – which would mean starting a new recruitment process. This can save the company a lot of money.
But sometimes disciplinary proceedings are simply not the best solution. The HR department usually knows best which employees fit the company well and which ones are simply difficult to integrate fully. Letting those employees go is also a task for HR.
People and organisational development
Alongside all these operational tasks, HR has another, less factual purpose: it is its job to help employees succeed and to develop them. HR can open up new career opportunities for employees by encouraging their development and by establishing the goals and wishes of team members in regular conversations. That also motivates employees to see a long-term future in the company. Offering further training opportunities such as courses and continuing education can likewise contribute to employee development.
Another important point is support – whether for mental illness, health problems, pregnancy or other issues. HR can support employees in these situations and make sure work and private life can be reconciled.
Communication
But supporting staff is not only about encouraging their personal development within the company. HR also carries the major task of communication between employees and management. It stands between these two levels and has the tricky job of representing the concerns of the staff and making sure they do not get lost when the company changes.
Part of this task involves regular feedback conversations, having an open ear for uncertainties and conflicts, and acting as a neutral communicator in the company, including within the team.
Why is Human Resources so important?
Good HR work can reduce a company's running costs. Smooth payroll processes, successful recruitment and positive employee support can save the company a lot of additional costs.
Through its work, the HR department can directly influence employee motivation and the working atmosphere. Transparent communication, a good and open working atmosphere and fair, appreciative treatment of employees strengthen employee retention. Employees who feel seen and who feel comfortable in the company are loyal to it.
Do I need an HR department in a small business?
Do I need an HR department in my small business too? We say yes. In small businesses in particular, bureaucratic matters are usually still handled by management. Tasks such as hiring new staff or calculating salaries are probably something you take on as the owner. You do not have to hire a separate person for these tasks – even if you should think about it early on. What gets lost here, though, is that one aspect of HR which may seem unimportant at first: the interface between staff and management. Having someone in the company who can concentrate on making sure the staff are doing well and that guidelines are being followed on both sides is important in small businesses too.
For your business of five to ten people, a team member who takes a few hours a week for team-related tasks may already be enough.
One thing is essential: as soon as your business grows, investing in someone who looks after your people is crucial to your company's success!
Supporting HR with digital processes
As you can see, HR has many important tasks in a company. Yet in many cases this department is still greatly underrated. Supporting employees and developing their strengths in particular often fall by the wayside because of time-consuming bureaucratic processes.
Studies confirm this: around a third of HR managers in Germany find too little time for strategic HR work because of demanding administrative tasks – that is, building feedback processes, holding regular employee conversations and supporting individuals and the team structure in the company.
These days, though, it is not actually that difficult to automate these processes so that HR can concentrate more on the people and less on the numbers behind them. Digital processes such as digital time tracking can take a great deal of work off HR's hands. Instead of processing timesheets by hand, apps like clockin can automate working time tracking in the company. At the end of the month, HR receives an automatic timesheet and can either work on it further themselves or forward it to accounting. On top of that, vacation requests and other absences such as sick leave can be organised through clockin.
As you can see, with simple changes such as digitalizing time tracking in your company you can make many processes easier for HR, so that it can concentrate more on keeping your company running smoothly, on your employees being well and on lifting the working atmosphere and motivation in the office.
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