Why is HR so important to have in a company?

When it comes to payroll management, benefits administration and hiring, many companies debate whether human resources should be handled internally or outsourced to a provider. Outsourcing is often cheaper, but firms can run into issues, especially in the recruitment process. New hires may not be a strong match for internal culture when someone outside the organization is making the employment decisions.

The Affordable Care Act has created significant changes for how some companies administer benefits, prompting many businesses to outsource. A study from ADP revealed that out of the nine key benefits administration areas, companies are likely to handle at least six partially or completely in-house. However, health care benefits are becoming more complicated, requiring external guidance. Some large employers rely on multiple external providers to manage some of these key areas, but this can make compliance more difficult.

Striking a balance for human resources

With the wide range of HR responsibilities, it can be difficult for managers in this department to devote equal attention to all areas. A recent study from Glassdoor found that many employers expect to face a talent shortage in 2015, and 48 percent of recruiters do not see a sufficient number of qualified candidates for open positions. Many lack visibility into their hiring processes, which can cause them to rely on outdated hiring methods. For example, the study found that many businesses still do not actively prospect for talent on social media. Nearly one-third of respondents reported that their methods of advertising open positions were outdated.

Because human resource professionals are typically being pulled in many directions at the same time, it can be a challenge to manage every issue that enters their offices. If an employee reports a problem, he or she may feel like the HR manager doesn't devote enough attention to the issue. This reduces trust in your HR department, which is detrimental over time. Although hiring needs to be a priority, this department also needs to maintain an active role in the company's operations.

Conducting HR audits

If HR is disconnected from the rest of the organization, it may be a good idea to conduct an audit of current processes to identify areas for improvement. HR.BLR.com recommended the following considerations for an audit:

• The hiring process: Employers need to assess their employment applications, interview procedures, background checks and offer letters, as well as state and federal compliance. What kinds of onboarding procedures are in place?

• Employee handbook review: Are existing policies still effective and in accordance with all laws? Some regulations have been updated over time, so it's important to understand how laws could potentially impact your policies. HR professionals need to make sure the guidelines in the employee handbook match the company's practices.

• Disciplinary policies: In addition to the employee handbook, an audit should cover all disciplinary actions. While it can be difficult to build employees' trust in the HR department, it's important to have a clear written procedure for prohibited conduct, consequences, the number of written or verbal warnings someone receives before termination and the termination process itself. Some employers do not have a formal process, but it's crucial that the publicized procedures match the actual practices.

• Recordkeeping: Some state and federal laws govern the length of time employees records must kept and what types of information should be retained. HR managers need to ensure all forms are properly filled out and personnel files are kept separate from medical records to avoid compliance issues.

The HR department needs to take an active role in events in the organization. Increased involvement can make employees more aware of this department.

Employer Solutions Blog | Sage HRMS