Human Resource Management: A Complete Guide to HRM (2024)

Without employees, there would be no companies. In fact, they’re a business’s greatest and most valuable asset.

And effective human resource management is essential to the health and success of any company, big or small.

But how exactly do ensure your HRM efforts are in tip-top shape?

Well, we’ve got the ultimate guide to human resource management to help out! In this guide, we’ll cover a broad range of topics, from the meaning of HRM, what it involves, top skills needed to succeed, career options, all the way to industry trends that you need to know.

Let’s dig right in!

What is human resource management?

By definition, human resource management (or HRM, for short) refers to the design, development and implementation of policies, practices and procedures to recruit, hire and onboard employees, and to manage their performance, development and wellbeing while in the employ of an organization.

In its infancy, HRM was merely about keeping records. Over time, this evolved to managing labor agreements, training staff and compensating employees. Today, it is based on the idea that employees are an important and highly valuable asset that can help the organization succeed and thrive.

How does human resource management work?

A guiding principle of HRM is to consult local, state and federal laws and regulations when managing its many nuanced aspects. For example, when hiring new employees, the HR department will align their recruitment practices with the Fair Labor Standards Act and the Family and Medical Leave Act, among other laws. Likewise, when developing a health and safety policy, they will consult the Occupational Safety and Health Act.

The company’s HR department will typically appoint different people to different roles to ensure all HR basics are covered. Their work is usually overseen by an HR manager or director.

The difference between HR and HRM

The term “human resource management” is often used interchangeably with “human resources”, and while there is some overlap in terms of functions and practices between the two, they’re not the same thing.

So, what is the difference between human resources and human resource management?

Put simply:

• Human resources is the department in a company that spearheads a broad range of functions, including — but not limited to — finding, hiring and training employees, managing compensation and benefits, overseeing employee relations, ensuring compliance with labor laws, and managing employee performance.
• Human resource management is a specific approach that the company’s HR department implements to maximize the efficiency and effectiveness of the workforce to the business’s overall objectives and success. It primarily focuses on, among other things, labor relations, employee training and development, and performance appraisals.

The importance of human resource management

Human resource management is crucial in ensuring a company’s success in several ways. In particular:

• It supports employees through every stage of the lifecycle, from onboarding to offboarding.
• It creates a great company culture, which itself drives employee engagement.
• It reduces costs and improves budgeting practices; as a result, it boosts profitability.
• It helps HR identify and nurture potential leaders within the company.
• It limits risks relating to compliance, legal issues and people management.
• It ensures employee and company data protection.

Key elements of human resource management

By understanding the key elements of HRM, you’ll be able to effectively design processes around these and drive organizational success. Here are the key elements and the main functions of HRM:

1. Recruitment and selection

One of the most visible roles of human resource management lies in the recruitment and selection of new employees. And now just any employees — the best of the best.

To this end, HRM professionals are tasked with:

• Writing job descriptions and creating job ads
• Sourcing candidates through various strategies
• Screening candidates’ résumés and conducting screen interviews
• Conducting job interviews and assessments
• Conducting reference and background checks
• Arranging job offers and employment contracts
• Handling preboarding and onboarding processes

2. Training and development

Once employees are brought on board, it is HR management’s job to continuously provide them with the necessary knowledge to complete and succeed in their roles. And that’s what training and development entails.

This involves creating a program where employees are focused on learning and developing their skills through various methods, such as:

• Lunch-and-learn sessions
• Mentorships
• Job shadowing opportunities
• Coaching
• Training courses
• Seminars, conferences and webinars

3. Performance management

One of human resource management’s main goals lies in ensuring that the organization’s workforce’s output aligns with its objectives. And this is achieved by, among many other things, setting expectations regarding performance, providing employees with regular feedback, and conducting effective performance reviews which can be done yearly or quarterly.

Managing employees’ performance is crucial, as it keeps them motivated to do a good job, while it also fosters a sense of accountability among individual employees, teams and entire departments.

4. Compensation and benefits

Compensation and benefits is another crucial facet that falls under the scope of HRM. By developing policies and putting in place plans that promote fair and competitive compensation and benefits, companies are not only able to keep employees satisfied but also lower turnover rates.

This incorporates a non-exhaustive list of particulars, such as:

• Salary, whether hourly, weekly or monthly
• Bonuses, including signing and quarterly bonuses
• Health, life, dental and other types of insurance
• Retirement plans and contributions
• Remote and flexible working arrangements
• Additional perks like gym memberships, tuition reimbursements and wellness programs

5. Onboarding and offboarding

Onboarding refers to bringing in and seamlessly integrating new staff members into the company. Offboarding, on the other hand, is all about managing transitions when those employees leave, whether or not on their own accord. Human resource management entails handling both of these processes.

When an effective onboarding and offboarding is put in place, it has the power to not only drive employee happiness and satisfaction, but to also make them feel welcome in the company. And that’s not all: it can improve retention rates and boost employer branding.

6. Diversity, equity and inclusion

Diversity, equity and inclusion (or DEI, for short) initiatives are paramount for the modern business’s success — especially considering how jobseekers and employees are increasingly prioritizing a safe and inclusive work culture over other benefits like a high salary.

And the better and stronger your company’s DEI efforts, the more culturally diverse will be your workforce, who can bring more different perspectives to the table. It also boosts all-around morale, and creates a workplace where people feel they belong and they’re appreciated and respected.

7. Health and safety

One of the other main functions of HRM is ensuring the health and safety of the company’s workforce, both physically and mentally, which is to be done in alignment with relevant regulations.

This involves developing relevant workplace procedures, putting up signs, and developing a comprehensive health and safety policy. On that note, this policy should cover as much detail as possible, from the proper handling of chemical substances to the location of first aid kids.

8. Organizational culture

Human resource management plays a crucial role in organizational culture — essentially the collection of values, systems, attitudes, traditions, visions and beliefs held by the company, and how it goes about doing things.

It’s the HR department’s responsibility to define, shape and refine the company’s culture, which can, when done right, drive employee motivation and organizational success. And it’s perhaps this that employees, old and new, will always remember than anything else.

9. Employee engagement and retention

Any good company that cares about its employees, and even its success, will want to find ways to create a workforce that remains happy with their jobs and loyal to the company and that won’t jump ship. This falls under the scope of HRM.

Some ways to ensure engagement and retention include:

• Offering career progression opportunities
• Implementing wellbeing programs
• Fostering an open line of communication
• Gathering employee feedback on their overall satisfaction
• Building a culture of appreciation
• Offering competitive wages and benefits

Essential human resource management skills

Below we’ll explore some of the most essential skills you need to succeed within HRM:

1. Communication

As HR managers need to continuously convey information and interact with employees (existing and potential), managers, stakeholders and other people, they need strong verbal and oral communication skills. They also need to be extremely comfortable with expressing themselves as well as with public speaking.

2. Organization

HR managers are responsible for a broad range of tasks, including recruitment, employee management, conflict resolution and performance reviews. As such, they need to be extremely organized individuals and able to juggle multiple projects simultaneously.

3. Strategic thinking

Strategic thinking skills are important for all HR jobs. Indeed, they allow HR professionals to align policies, strategies and principals with the company’s objectives. For example, the ability to think strategically is essential in selecting the right talent for the right jobs.

4. Adaptability

It’s in the very nature of HRM that processes and regulations are constantly changing and evolving. As such, HR professionals need to be adaptable, flexible and open to change in order to effectively and adjust to the ever-evolving landscape of the industry.

5. Conflict resolution

Conflict is bound to arise in even the best and most positive and collaborative workplaces, and this is often a result of clashing personalities. It’s HRM’s responsibility to not only address these conflicts but to also resolve them when they do occur.

6. Empathy

Being empathic is an essential quality for HR managers, as it allows them help employees with personal problems and identify signs of burnout, among other things. This then creates a welcoming, inclusive and caring workplace, which ultimately decreases turnover and increases employee happiness and satisfaction.

7. Negotiation

Negotiation skills are another must-have for a successful HR manager. Indeed, being a capable negotiator allows you to navigate relationships in the workplace, whether it’s discussing salary packages, preparing contracts, arranging promotions, managing workplace conditions or handling disagreements.

8. Ethics

With a myriad of laws and regulations to navigate in the ever-evolving HR landscape, professionals in the field need a strong sense of ethics. This is essential for making tough decisions and taking action to preserve the integrity of the organization, its practices and its employees.

9. Tech-savviness

Most, if not all, HRM processes are carried out on a computer, and this requires familiarity with the various tech and tools used for the job, which include human resource management systems, applicant tracking systems and other specialist software.

10. Training and development

An important part of human resource management is employee training and development, which includes developing budgets and training programs. As such, working within the field of HRM requires a deep-rooted knowledge of these processes.

Human resource management careers

The HRM field offers a non-exhaustive list of career paths, of which we’ll explore the 10 most popular below:

1. Benefits coordinator

Average salary: $74,530/year

Also known as an employee benefits coordinator, this HR job involves administering employee benefits, such as health insurance, leave policies, wellness programs and retirement plans. They research benefits plans and work closely with providers to offer these benefits to employees, whom they help enroll in company benefit programs.

2. Compensation specialist

Average salary: $74,530/year

Compensation specialists are responsible for a company’s compensation program. They are tasked with, among other things, researching industry trends, assessing their company’s pay structure, performing cost analyses to evaluate compensation policies, and overseeing the distribution of pay.

3. Employee relations manager

Average salary: $89,980/year

An employee relations manager’s main goal is to make the company a better place for its employees. They do this by fostering a culture of effective communication, maintaining a positive work environment, negotiating contracts, consulting on company policies, investigating workplace issues, and addressing employee complaints.

4. HR assistant

Average salary: $48,800/year

HR assistants are responsible for performing daily administrative and HR duties in a company. Their tasks typically include screening and vetting candidates, assisting with job interviews, issuing employment contracts, compiling and maintaining employee records, and supporting HR-related training programs.

5. HR generalist

Average salary: $67,650/year

Reporting to the HR manager, an HR generalist is responsible for handling daily core HR functions such as recruitment, compliance, compensation and employee relations, while they also support managers in making talent-related decisions. Meanwhile, as an HR generalist you’re expected to expected to have a strong understanding of employment laws and regulations on a local, state or federal level.

6. HR help desk manager

Average salary: $67,760/year

HR help desk managers are tasked with leading the company’s HR help desk operations and managing an internal support team. Their duties are varied and usually include things like monitoring metrics, setting goals and KPIs, maintaining an internal knowledge base, resolving employee requests, and dealing with escalated issues.

7. HR manager

Average salary: $136,350/year

An HR manager oversees all aspects of the HR functions and operations of a company. They’re responsible for recruiting, interviewing and hiring employees, but their role goes beyond this to ensure health and safety, manage employee compensation and benefits programs, oversee employee relations, supervise disputes, and oversee disciplinary actions.

8. Payroll specialists

Average salary: $47,390/year

Payroll specialists are in charge of a company’s payroll operations and are responsible for ensuring the timely and accurate compensation of employees. They do this by overseeing overtime, bonuses and deductions, computing employees’ time worked and production, tracking payments, and handling payroll disputes.

9. Recruiting manager

Average salary: $136,350/year

Recruiting managers, also sometimes known as staffing managers, are responsible for hiring and recruiting employees. They typically oversee a team of recruiters, advise on interview techniques, develop recruitment strategies, ensure adherence to labor laws and regulations, participate in job fairs, and build networks to attract top talent.

10. Training and development manager

Average salary: $125,040/year

A training and development manager spearheads a company’s training programs. Their typical duties include, among other things, assessing employees’ needs for training, developing course materials, managing training budgets, and supervising a team of specialists that includes instructors, instructional designers and program developers.

How to get into human resource management

If you’re considering a career in HRM, you’ll need to take a few strategic steps to get there:

Step 1: Earn a degree

The first step to a career in human resource management is earning a degree, such as in human resources, management, business or a related subject. While this isn’t essential, it can be extremely helpful in making you an attractive candidate when applying for jobs — particularly considering the high level of competition in the field.

Whichever degree program you choose to pursue, it’s important that it includes courses that will introduce you to the world of HRM and its nuanced concepts, such as organizational theory, workplace diversity, business ethics, employee development and training, performance management, and legal issues and compliance.

Step 2: Gain work experience

Once you’ve completed your degree education, and even while still at university, it’s a good idea to gain hands-on experience, which can be done through internships or entry-level jobs. This will help you get a better grasp of the field of HR, form industry connections and build a foundation of lasting skills that are required for more advanced HRM positions.

To find relevant opportunities, consider attending career fairs, doing volunteer work, job shadowing or working with a mentor. Your university, meanwhile, may be able to help you find formal work placements as part of your degree.

Make sure to highlight relevant experience on your résumé.

Step 3: Develop your skills

The next step is to find ways to develop and build a powerful skill set that will boost your chances of success within HRM. This can be achieved through various ways, including attending workshops and seminars, reading books, reading industry news and trends, and completing classroom-based or online courses.

Some training courses worth considering include:

• Essentials of Human Resources Management by GLOMACS
• HR Management and Analytics by Wharton Executive Education
• Managing & Leading in a Multi-Cultural Workplace by AZTech Training

Step 4: Get certified

While certification isn’t necessary, it can significantly improve your job prospects, as it can prove your expertise, credibility and value to potential employers. Completing a certification typically involves meeting specific educational requirements and passing an exam.

When looking at certification programs, it’s important to ensure they’re offered by accredited institutions. Some good programs to consider include:

• SHRM Certified Professional
• Professional Certificate in Human Resource Management by San Diego State University
• Human Resources Management Certificate by UCLA Extension

Step 5: Build a network

Finally, you’ll need to actively a build a network of likeminded individuals and industry experts, which you should start doing as early as your college education. With a strong network, you will get access to additional career opportunities and further your skill and knowledge development.

Building a network can be achieved with several methods, including through attending in-person and virtual networking and industry events, online networking platforms like LinkedIn, social media, and industry groups.

Human resource management systems

Investing in a human resource management system will make your job a whole lot easier. Indeed, this specialist software can help you effectively and efficiently navigate your functions as an HR pro.

Top 5 HRMSs to consider

Need some inspiration? Here are five HRMS contenders.

1. Deel HR

Deel HR is, by its own declaration, the “free global-first HR platform built to scale with your business”. The platform allows you to manage all aspects of HR, from time off to expense management and onboarding to reporting, all in one place. Its most impressive feature is perhaps the ability to remain compliant worldwide with built-in labor laws.

2. BambooHR

Boasting over 34,000 companies of all sizes as clients, BambooHR is one of the most popular human resource management systems on the market. It offers a range of features, including payroll and time, hiring and onboarding, employee performance, and HR data and reporting.

3. GoCo

Designed specifically for SMEs, GoCo is a modern all-in-one HR solution that consolidates essential HR functions to streamline processes for busy professionals. Its features include electronic signatures, PTO tracking and performance reviews, while it offers integrations with over 100 apps such as QuickBooks and ZipRecruiter.

4. Paycor

Featuring a 30-day free trial, Paycor helps small businesses save money and time — and thrive. It provides a single tool for payroll, HR, analytics and expense management, which can be tailored to your specific business, whether it’s in healthcare, hospitality or manufacturing.  It can also be integrated with over 320 apps.

5. TriNet

TriNet’s selling point is that it grows with your business. Its all-in-one HR platform allows for seamless workforce management, payroll processing and benefits administration, while it allows you to claim tax credits 6–9 months faster than usual. Pricing starts from just $10 a month, while you can also book a free demo to test the waters.

How to choose the right HRMS

It can be a daunting task choosing an HRMS for your business, considering the many options available to you. But the entire process can be simplified by considering the following factors:

• What features do you need? This includes things like payroll, attendance, compliance, talent management and scheduling.
• What is your budget? This will allow you to choose a system that offers an appropriate pricing model, such as fixed fees, flat fees or per module.
• How scalable is it? If your company is projected to grow in the near or far future, it’s a good idea to determine whether the HRMS can grow with it.
• Is it secure? The last thing you want is a security breach!
• Is it accessible? It’ important to choose a platform that is available across different devices and that can be accessed anywhere, anytime.

Human resource management trends

Here are some HRM trends to look out for:

AI adoption and adaption

AI is all the rage, and it’s not going anywhere anytime soon — which is why both companies and workers have adopted in into their processes. But it’s not enough to simply adopt AI — you also need to be willing to adapt to its constant evolution.

This can be done through different means, such as encouraging employees to experiment with AI, implementing comprehensive training, developing clear strategies and staying on top of AI developments. It’s equally important to address job displacement fears, as workers are increasingly worrying about the safety of their jobs thanks to AI.

Silver workers

Silver workers, workers aged 75 and over who don’t want to or can’t retire, are the fastest-growing segment of the US workforce, but unfortunately are often neglected in favor of younger workers. Most companies also don’t typically meet the requirements of silver workers, such as ergonomic office designs and flexible working arrangements.

This provides you with the perfect opportunity to tap into an unused talent pool that is both highly experienced and knowledgeable, as well as create new levels of productivity.

To do this, you will need to find ways to accommodate the needs of silver workers, which includes designing age-inclusive benefits, prioritizing lifelong learning and fostering intergenerational mentoring.

New-collar jobs

New-collar workers are workers who develop technical and soft skill sets through non-traditional career paths and who largely don’t have a university education. And they’re on the rise. Indeed, more and more job opportunities are becoming available in fields like AI and cybersecurity — and chances are your company will need these workers in the near future.

As such, it’s a good idea to start thinking about how your company can tap into this new type of workforce, which can be achieved through targeted recruitment and onboarding, as well as investing in appropriate tech.

FAQs about human resource management

Here we answer some common questions relating to human resource management:

Q: Is HR a good career?

HR is indeed an excellent career choice. Indeed, as a rapidly growing and dynamic field, it offers job security, a good salary and plenty of development opportunities. It also offers you the opportunity to solve problems, as well as work with and advocate for people.

Q: Does my business need an HR handbook?

Yes, whether you run a small business or a large corporation, a well-written HR handbook is essential particularly when hiring new employees, implementing new policies or scaling operations.

Q: What is HR compliance?

HR compliance, in its most simplified definition, is the practice of ensuring your organization’s policies and procedures adhere to local, state and federal laws and regulations. This includes things like data protection, anti-harassment and equal employment.

Final thoughts

And there you have it: everything you need to know about human resource management—from what it is to why it’s important and what it entails to the skills you need to develop for a successful career in this exciting field.

If there’s one thing to remember from reading this article, it’s that HRM is only as good as the people, knowledge and policies behind it. Indeed, with the right tools and expertise, it can take your company to new heights. Otherwise, it will just bury it six feet under.

Got a question about human resource management? Let us know in the comments section below.