Is a Human Resource Department Necessary for Today’s Businesses to Function?

Friday, April 11, 2014

 

I routinely see articles questioning whether or not Human Resources is any longer required.  My first thought is that HR is no more necessary than finance, accounting, customer service, marketing, sales, engineering, production or shipping.  There is no legal requirement that a function called “human resource” is named in a company’s organizational chart, however, there are numerous legal activities which are performed by HR.  Many organizations state that “people” are their company’s most important resource, that being the case who should manage that resource and how?

 

Organizations are generally built around areas of expertise and specialization.  There is a reason why finance and accounting are staffed with employees with an understanding of financial management, accounting principles, and business management techniques.  Companies employ persons with these expertise because it is a belief this knowledge will lead to an optimal level of operations of the organization.  The same is true for Human Resources; organizations generally seek out individuals who have knowledge of recruitment, employee relations, labor relations, compensation, and benefits.  Most employers hold a belief these expertise will lead to the best possible level of operations of their human resources.

 

Many see HR as a cost rather than a profit center, others see HR as a barrier to what they want to accomplish, and still others see HR as staffed with individuals who have no business acumen or knowledge of how their business operates.  Granted, HR does not build a product or deliver an external service which produces revenue.  There are times when a member of the organization would like to do something that is illegal and HR must raise an objection.  HR staff come from a wide variety of backgrounds and may lack a detailed understanding of every facet of an organization’s end-to-end production cycle.

 

Organizations do not maintain an HR function to generate profits, which the same can be said for finance and accounting.  HR’s charter is to manage the human resources of an employer is the same manner that finance and accounting manages the fiscal and monetary resources of the organization.  Professional and lay publications are full of stories recounting the inappropriate behavior by an employer relative to this or that anti-discrimination, wage and hour, or labor law.  Often that action was taken in spike of the counsel of some HR manager and even against legal recommendations.  Every employee within an organization should have a basic understanding of the products and/or services their employer produces, this includes the HR staff.  And to the greatest extent possible, HR staff should walk in the shoes of store, plant, and mill managers and line supervisors.

 

To a greater or lesser degree, every organizational unit within a business is co-dependent upon other units.  Sales cannot produce revenue without marketing, which cannot function without a product or service to promote; production cannot produce without the aid of engineering, and finance and accounting must rely on sales and marketing to generate income.  And while great strides have been made in the area of industrial robotics, much of the work is still being performed by humans.