What Does HR Do?
Key Takeaways
HR is a multifunctional department handling talent, compliance, compensation, and culture.
Modern HR plays a strategic role in driving business growth.
HR ensures both legal protection and employee satisfaction.
Investing in HR early can help businesses scale responsibly and sustainably.
Resources like SHRM, HR Dive, and The HR Brief can help employees and business leaders stay informed.
What does HR actually do? Whether you’re an employee wondering why HR needs to be involved in your onboarding process or a small business owner trying to understand why you need an HR department at all, you’re not alone in asking this question. Human Resources (HR) is often misunderstood as merely administrative, but in reality, it is a strategic cornerstone of any thriving organization.
From recruiting top talent and managing employee benefits to ensuring legal compliance and cultivating company culture, HR departments wear many hats. This post will demystify HR functions and showcase how they support business goals, protect the company, and foster an engaged and productive workforce.
Core Functions of HR
1. Recruitment and Talent Acquisition
One of HR’s most visible roles is sourcing, attracting, and hiring talent. This includes:
Writing job descriptions
Screening resumes and conducting interviews
Coordinating hiring manager interviews
Handling offer letters and negotiations
A good HR team ensures that hiring practices are equitable, efficient, and aligned with the organization’s values.
2. Onboarding and Training
Once a candidate is hired, HR takes the lead in helping them integrate into the company. Onboarding includes:
Paperwork and compliance (e.g., I-9 forms, tax documents)
Orientation sessions on company policies and values
Access to training and development platforms like Udemy Business or LinkedIn Learning
Effective onboarding boosts retention by 82%, according to research from Glassdoor.
3. Employee Relations and Conflict Resolution
HR is a neutral resource when interpersonal or departmental issues arise. Functions include:
Mediating disputes between employees or between employee and management
Investigating harassment or discrimination claims
Enforcing workplace policies to ensure fairness and respect
4. Compensation and Benefits
HR professionals also design and manage:
Salary structures and compensation benchmarking
Health insurance, 401(k), paid leave, and other benefits
Perks such as gym memberships, tuition reimbursement, or commuter stipends
According to the Society for Human Resource Management (SHRM), 60% of job seekers consider benefits a major factor when accepting a job offer.
5. Legal Compliance
One of HR’s most crucial roles is ensuring the company complies with employment laws. This includes:
Staying updated on laws like FMLA, ADA, EEOC, and OSHA
Managing workplace safety policies
Maintaining documentation to avoid legal liability
Non-compliance can lead to lawsuits, fines, and reputational damage.
6. Performance Management
HR develops and manages performance review systems, including:
Setting employee performance goals
Facilitating 360-degree feedback
Managing performance improvement plans (PIPs)
A transparent performance process leads to higher employee satisfaction and clearer growth paths.
7. Employee Engagement and Culture
Modern HR departments focus on fostering positive workplace culture through:
Employee satisfaction surveys
Culture initiatives like DEI programs and team-building activities
Recognition and reward programs
Gallup reports that highly engaged teams show 21% greater profitability.
8. Learning and Development (L&D)
To support growth, HR often manages:
Career development plans
Leadership training programs
Upskilling/reskilling opportunities
This helps retain top talent and build future leaders from within.
9. Strategic Planning
Increasingly, HR has a seat at the executive table. Strategic responsibilities include:
Workforce planning
Organizational development
Mergers and acquisitions support
Diversity, equity, and inclusion strategy
The Evolution of HR
Historically, HR was largely administrative. Today, it is a hybrid of legal compliance, people strategy, and business analytics.
Data-Driven HR: Use of HRIS (Human Resources Information Systems) to analyze turnover, hiring effectiveness, and engagement.
Remote and Hybrid Work: Managing distributed teams requires new tools, policies, and skills.
Employee Experience Focus: A shift toward treating employees like internal customers.
Case Study: At Salesforce, HR helped reduce turnover by 20% by redesigning performance reviews around employee feedback.
Myths About HR
Myth #1: HR only protects the company.
Truth: HR must balance the interests of the business and its people.
Myth #2: HR doesn’t handle real business challenges.
Truth: HR tackles everything from DEI to crisis response and organizational change.
Myth #3: HR is just paperwork.
Truth: Automation has reduced admin tasks, allowing HR to focus on strategy.
When Does a Business Need HR?
Even small businesses benefit from HR practices. You might need HR when:
You have 1+ employees
You experience your first legal issue
Your business is in a legal prone or complicated employee field
You start scaling and need structured hiring
Options include hiring a full-time HR professional, using fractional HR consultants, or outsourcing to providers like BambooHR or Gusto.