After working in human resources for several decades, it has become painfully obvious that many business owners have no idea what an HR person does.
And oftentimes, their ideas about what they should be doing couldn’t be any further from the truth.
Generally speaking, HR people tend to do just about everything, whether that’s bookkeeping, office management, hiring, firing, or just ordering some pizza for an employee meeting.
That being said, it’s not surprising that many business owners seem to be unsure of what their HR departments actually do or what they should do to make their businesses more profitable and avoid legal issues.
The truth is, your human resources department is just as important as your finance, logistics, and operations departments, but for whatever reason, business owners don’t seem to know much about HR.
But as a business owner, while it is important to understand what the people in your HR department are doing, what’s even more important is understanding what they should be doing.
So, if you’re still scratching your head, asking yourself, “What does an HR person do?” or “What is the purpose of an HR department?” then you should definitely keep reading.
Because in this article, I’m going to explain everything you need to know to understand what an HR person does, and more importantly, what they should be doing.
What Do Business Owners Think HR People Do?
If you own a business, ideally, you should understand the inner workings of every single one of your departments.
But for whatever reason, business owners tend to have quite a skewed idea of what an HR department actually does.
At the same time, HR departments also have to deal with all that “touchy-feely stuff” that tends to make business owners queasy.
But for the most part, business owners tend to think of HR as the people who deal with hiring and firing, handle unemployment claims and benefits, keep employee records up to date, and otherwise fill out stacks of paperwork all day.
And while a good HR person should be able to do all of those things with ease, there’s so much more to it than that.
Being great at what you do in the field of HR requires deep knowledge of employment law, communication, and administration, among other things.
Even still, many business owners don’t think much of these duties, and it’s not uncommon for them to hand them over to pretty much anyone, whether they’re in the finance department, managing the office, or doing something else entirely.
But in most cases, these people have been put in positions they aren’t qualified for, and their lack of knowledge can end up getting business owners into some pretty hot water, including fines, penalties and jail time. Seriously – I’m not making this stuff up!
That being said, now that we’ve discussed what business owners think HR people do, let’s attempt to answer the question, “What does an HR person do?”
What Does an HR Person Do?
Aside from the basic day-to-day duties I listed above, a good HR person needs to have an in-depth understanding of your business, including a firm grasp of your operations, objectives, and what drives profitability for your business.
At the same time, they should also be able to sit at the table with you and have frank, fruitful discussions, while considering the goals of your business and figuring out how to implement and support those objectives from an HR perspective.
This is a very brief, albeit accurate description, but let’s take a closer look at each of these aspects, so you can confidently answer the question, “What does an HR person do?”
Make Recommendations
A good HR person should definitely not be a yes man, or woman.
In other words, they have to be courageous and knowledgeable enough about employment law to be able to say, “Yeah, we can’t do that, and this is why we can’t do that.”
They also have to be ballsy enough to be completely open and honest with the business owner and state the facts in no uncertain terms.
For example, if the employer is doing something, or wants to do something that could get them in legal trouble, their HR person needs to be brave enough to ask them, “How many zeros do you want on the end of that check when you get sued?”
If money is planned to be spent on a project, the HR person should be asking, “Is this a nice-to-have or a must-have?”
If a hiring decision is being made, they should be able to explain how this new hire will pay for themselves, make the company more profitable, and avoid losing money.
If it’s a termination decision, on the other hand, they should be well-equipped to inform the business owner of any legal risks involved, or the effect this decision could have on morale, or productivity, for instance.
In any case, when making recommendations, a good HR person needs to be able to lay out their case and provide all the pertinent information in a timely manner, so the business owner can easily make a decision.
Understand the Business
As I’ve already mentioned above, a good HR person needs to have an in-depth understanding of the business they work for, on as many levels as possible.
This means that they should know as much as they possibly can about every department in the company, including what it does and how its leadership operates.
This way, when you set your strategic direction for the next three to five years, then they’ll know how to kick things into high gear and help you find the right people to execute your strategy.
But there’s actually a heck of a lot more to it than that.
In order to have a comprehensive understanding of the business they’re working for, they need to know the company’s competition, what they’re capable of doing, and what they’re not capable of doing (and not just in their HR departments), so they can know whether or not they’re a viable competitor and can inform the business owner accordingly.
Ideally, they should be familiar, not just with the competition, and what it’s doing, but also with their industry as a whole.
Moreover, they need to be well-versed in what other industries are doing, in a variety of areas, which will allow them to glean great ideas that can be transferred to the business they’re working for.
All of this information will allow a good HR person to keep the business owner informed on what they can do to ensure their business runs smoothly, and profitably, in pretty much all areas.
Maintain Profitability
HR people don’t make or sell products or services, and as a result, business owners tend to think of their HR departments as nothing more than overhead.
But even though HR people aren’t typically the ones doing the selling, they can and should play an integral role in helping business owners to understand how they can ensure their businesses remain profitable.
This involves helping the business owner to understand how proper administration of things like employee relations, performance management, benefits and compensation, training and development, employee recognition, communications, and avoiding lawsuits can all help the business to save money and maintain profitability.
Because at the end of the day, if things aren’t properly communicated to your employees, or they’re underperforming, fighting with each other, feeling taken for granted, or feel their rights as an employee have been violated, and they’re looking to take you to court, then your business is probably not going to be very profitable.
This stuff isn’t that tough to understand, but it’s something that’s often overlooked by HR people and business owners alike.
That being said, any good HR person should have an intimate understanding of all these aspects, and be able to explain them to the business owner and advise them on the best ways to maintain the profitability of their business.
Stop Problems Before They Start
Ideally, a good HR person should be able to identify potential issues across every aspect of the business and work to mitigate them before any problems can arise.
For instance, if an employer wants someone fired today, then the HR department needs to consider whether or not this has the potential to cause problems.
In this case, that would involve figuring out whether there’s any documentation of discussions, warnings, or other disciplinary behaviour with the employee in question, and also considering if they have a mental disability, a medical condition, or are a specific minority who would be more likely to win a wrongful termination lawsuit.
Just as importantly, they need to determine whether this person has the potential to get violent in that situation, and then come up with ways to avoid having anything like that happen, if need be.
Once all these considerations have been made, then they can go back to the business owner and explain the possible legal ramifications, or other potential consequences, of the decision they’re about to make.
There are countless examples of this sort of thing, and I could pretty much go on forever.
But the point is, any good HR person should have more than enough knowledge to know all the potential risks of an event or decision, and therefore be able to stop any problems before they start.
Are you looking for a good HR person to help you avoid lawsuits, improve employee morale, and maintain profitability? Contact us today to find out more about what we can do for you.
Business Leadership, Business Management