By: Dr. Claudine Beckford

Human Resources Management (HRM) overarching responsibility is to help employers and employees build and maintain positive relationships.  So, let us examine the 8 essential functions in today’s modern human resources management department:

1. Recruiting, hiring, and retaining the internal job markets

Recruiting employees is a routine and strategic function essential to any business. Talent acquisition, a well-known function of any HRM department, involves aligning the workforce's capabilities with organizational overarching goals. Human Resources Management departments must be strategic when hiring for new roles, restructuring teams, and making hard staffing decisions, which can significantly impact the organization's success. 

2. Employee engagement

Employee engagement is critical to maintaining a positive and productive work environment. The importance of two-way dialogue and engagement between employees, HRM, or senior leadership cannot be overstated. It is the only way to build and maintain a consistent, relatable employee culture where everyone is united around shared goals, mission, and values. 

Leadership, managers, and the HRM department are crucial in building solidarity and trust within the organization.1 This trust is critical for maintaining a positive work environment and ensuring employees feel valued and respected. HRM's role in this aspect reassures managers and business leaders of HRM's capabilities in maintaining a positive work environment. 

3. Performance management

Performance management is not a one-time event but a continuous process that is important for helping managers and employees align their goals and expectations.2 This constant feedback loop, a crucial part of HRM's role, allows team members many opportunities to improve their work. The continuous nature of performance management engages HRM professionals and keeps them committed to helping teams achieve long- and short-term company goals and objectives. 

4. Compensation and benefits

Let’s get straight to the point: the workforce expects this in exchange for their hard work. Compensation and benefits are the reasons why employees are at work. A business's compensation goals should include staying competitive, with salaries aligned with the candidates' or employees' skills and education. According to the SHRM, “63% of U.S. employees said compensation and benefits are important, second only to respectful treatment when determining job satisfaction.”4 

In any organization, the HRM department is responsible for recruiting, hiring, and retaining qualified, talented individuals. Some of these perks are:

• Health insurance (e.g., medical, dental, vision)

• Paid holidays Paid time off

• 401k opportunities

• Retirement plans

• Vacation and sick time

• Overtime pay

• Education benefits

• Referral bonuses

• Life insurance

• Parental leave

• Stock options

• Bonuses, commissions, and merit pay

• Reimbursement programs

One of the most powerful tools HRM professionals have is the ability to offer potential/employees a benefits package they cannot refuse.4 

5. Development and training

Although employee development and training are often lumped together and crucial to the employee experience, they have some essential distinctions. Job-specific training is needed. To succeed, it ensures that employees have access to the right tools and skills to do their jobs. There is an immediate impact, and it is measured in short-term outcomes. Employee development focuses on employee growth. This is a long-term, behavioral approach.5

Human Resources Management departments are responsible for offering new and exciting employees the appropriate development and training tools to keep employee morale high. This will ensure employees know the company's values and acknowledge their work. A company's human capital is what makes it successful.2 

Providing employees with development and training is essential for ensuring they are prepared for their roles, have upward mobility, and have support from their organization. A company's talent management strategy should include development and training, which can directly impact employee engagement and retention.5

6. HRM legal and audit compliance

According to the SHRM article "How to Conduct an HRM Audit," a compliance audit generally has two parts: evaluating the organization’s HRM policies, practices, and processes and reviewing current HRM data.4 Indicators of potential problems include filed internal grievances, pending legal complaints, and turnover and absenteeism rates. 

• Most lawsuits can be traced to issues related to hiring, performance management, employee discipline, or termination. Other high-risk areas include:

• Misclassification of exempt and nonexempt jobs.

• Inadequately maintained personnel files.

• Prohibited attendance policies.

• Inaccurate wage and hour or time records. 

• Form I-9 errors.

• Outdated federal and state labor and employment law posters. 

• Insufficient record retention.

Research the requirements for each of these areas, determine the scope of the audit, gather the necessary information., and then create action plans to correct or mitigate the risks.” The bottom line is that the HRM department can regularly conduct compliance audits to ensure that labor laws, internal policies, and procedures follow best practices.4 

7. What is HRM risk management?

Managing human resources risks is increasingly challenging for organizations to thrive and remain compliant in the 21st-century world of work. Risk is an inevitable part of business. In risk management, potential downfalls are anticipated and prepared to minimize their impact. It is the HRM department's responsibility to assist leadership, management, and employees across organizations in applying risk management to their operations. Still, HRM should focus on the risks for which it is uniquely responsible.5

A company's cybersecurity and data privacy are crucial responsibilities. HRM must implement a privacy policy that ensures employee data collection and storage are handled safely and ethically.5

8. The effect of AI revolution on employee morale in the context of HRM 

McKinsey & Company estimates that AI could consume as much as 30% of work hours by 2030 and that there could be as many as 12 million occupational transitions. The casualty is the people in the workforce that AI will replace over the next 5 – 10 years. The urgency of HRM leaders is to identify the appropriate development and learning to reskill and retrain employees affected by this inevitable AI technology shift and the current and future workplace. Leadership and HRM should work together to pay attention to this critical topic and consider how HRM can positively use technology in the workplace. 

Key HRM Risk Areas to Have on Your Radar

• Workforce risks: The intricacies of hiring personnel present significant challenges for organizations. Issues like turnover rates, employee burnout, workplace relationships, conflicts, harassment, and insufficient employee engagement can adversely affect the company’s performance and hinder its growth. Changes in work dynamics introduce additional risk factors. An example is offering a remote/hybrid work setup. Employees may find this desirable, but lacking in-person dialogue and connection can lead to isolation and communication failures.2 
• Compliance: Regarding human resources activities and policies, it is critical to comply with several laws and regulations, often in numerous states and countries.2 
• Employee data management: A company's cybersecurity and data privacy are crucial responsibilities. HRM must implement a privacy policy that ensures employee data collection and storage are handled safely and ethically.2 
• Ethics: Human Resources is crucial in promoting ethical behavior within organizations concerning their employees. Maintaining ethical standards in hiring and employment practices can significantly minimize the likelihood of disputes between employers and employees.
• Learning and Development: The Human Resources department plays a crucial role in ensuring that the organization is staffed with individuals possessing the necessary skills to meet its objectives. Additionally, employees seek opportunities for career advancement and skill development within the company.4 
• Compensation and Benefits: Equitable pay and benefits across the entire workforce are essential. Human Resources must strive to offer compensation packages that are both competitive and fair, aligning with market standards while also considering the organization's financial objectives. It is essential to ensure equitable pay and benefits across the entire workforce. Human Resources must strive to offer compensation packages that are both competitive and fair, aligning with market standards while also considering the financial objectives of the organization.3 
• Mergers and Acquisitions: The M&A process involves many risks involving staffing and other HRM matters, so HRM professionals play a vital role. For instance, turnover is often a significant issue within leadership. According to GRIN.com, research shows “employee turnover in the context of mergers and acquisitions transactions, approximately 50-75% of key managers leave voluntarily within two to three years after a company has been acquired.”5

Conclusion

This article aimed to review the literature on the effectiveness of essential aspects of modern human resources management in maintaining employees' human capital. However, the research found that the relationship between Artificial intelligence (AI) and employee role retention is an ongoing concern in the global workforce. Navigating other factors include job satisfaction, work-life balance, opportunities for career development, employee engagement, recognition, and communication on the importance of retaining employees, company culture, leadership, and other benefits such as offering learning and development opportunities that can affect employee retention. Additional research is required very shortly.

 Endnotes

 Mary K. Pratt and Sharon Florentine (2022). Employee retention: 10 strategies for retaining top talent. CIO. https://www.cio.com/article/251060/employee-retention-10-strategies-for-retaining-top-talent.html

 William Brewer. (2024). 7 Key Things That Should Be On HR’s Radar In 2024. HR Excellence Magazine. https://www.hr.com/en/magazines/all_articles/7-key-things-that-should-be-on-hr%E2%80%99s-radar-in-2024_lv517kii.html

 Sorn, M.K., Fienena, A.R.L., Ali, Y., Rafay, M. and Fu, G.H. (2023) The Effectiveness of Compensation in Maintaining Employee Retention. Open Access Library Journal, 10, 1-14. https://www.scirp.org/pdf/oalibj_2023071016420224.pdf 

 Society for Human Resource Management (SHRM) (2021). Conducting Human Resource Audits. https://www.SHRMm.org/topics-tools/tools/toolkits/conducting-human-resource-audits

 Peter Cappelli and Ranya Nehmeh (2024). HR’s New Role. Harvard Business Review. https://hbr.org/2024/05/hrs-new-role

Bryan Hancock, Bill Schaninger, and Lareina Yee (2024). Generative AI and the future of HR. McKinsey & Company. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/generative-ai-and-the-future-of-hr