The Human Resources Function

As a business owner or member of a small business charged with managing the firm's personnel, one of your jobs is to focus on the practices and policies that directly affect the welfare and morale of your organization's most important asset: Its employees. It's up to you to help your firm strike the optimal balance between the strategic needs of your business and the basic needs of your staff. The way you manage your employees can make all the difference in your ability to differentiate your company from the competition.

But finding and keeping top talent can be a challenging task. As business has become more complex, so has the human resources function, now encompassing everything from assessing staffing needs more strategically to launching effective training initiatives, interpreting federal and provincial codes, and implementing policies and benefits that safeguard workers while protecting company interests. And the stakes are high. The legal and economic consequences of a major HR function misstep can be enormous.

Managers and business owners with teams that consistently delight customers and generate revenue for the firm aren't difficult to spot. They are the ones who thoroughly understand the company's most important needs, know how to attract the best people and are intent on improving their work environment so their employees feel free to draw on all of their competencies. In short, they're good at managing the human resources function.

The HR Function: Traditional Vs. Today

Every company – regardless of size, location or purpose – must deal with HR issues in a way that's best suited to its needs and situation. If you own a small business, you probably function as your own HR manager – that is, you personally oversee and conduct each classic HR function for your company: You recruit and hire, you set up compensation and benefits packages, and you write paycheques and keep appropriate records.

The chances are good, too, that you're the person responsible for training and developing the people you hire. And although you may not need to publish a company newsletter to inform staff about what's going on in the company, you probably make a point of keeping them in the loop.

Larger companies have entire HR departments and typically employ specialists in areas such as benefits administration or retirement plans. But smaller business owners who don't have the resources for such specialization must ensure that they are solid generalists – that is, they possess skills in several areas of the human resources function rather than one particular specialty.

The HR function, in general, has undergone enormous changes in the past 20 years. Some companies still take a highly structured, largely centralized approach to HR management. The majority of companies today, however, take a far more decentralized approach, with HR practitioners and line managers working cooperatively to develop and implement policies and programs.