Your success in acquiring and managing human resources for your business may be the single biggest factor in whether your business thrives or fails. Human resources covers a broad range of practices but all of them relate to the processes, strategies and practices put in place to attract, hire and manage the people who make up your business.

What falls under human resources?

The major areas that fall under human resources are:

• Recruiting covers the business strategy for attracting talent and the hiring process itself.
• Compensation and benefits covers all staff remuneration issues, from salary negotiation to processing payroll.
• Training and personal development covers any practices designed to make employees more effective and valuable.
• Business/employee relations covers dispute resolution between you and employees and general employee relationship management.
• Discipline and terminations covers all corrective and punitive measures for employee misbehaviour and the process for ending their employment.

The larger the business, the more demanding and complicated the human resources practices will be. While a business owner with only one or two staff may be able to handle their own human resources, in large companies it usually has its own department.

What is the purpose of HR?

Human resources revolves around creating worthwhile business/employee relationships. This goes both ways - it ensures that employees are productive, profitable members of the business, and it ensures that the business treats all employees equally and fairly. Through the roles detailed above, human resources achieves a number of important business goals:

• Define the business purpose: part of HR’s role is to ensure all employees are participating in the same business culture, with the same goal. The first part of this is usually providing an employee handbook and conducting an induction session.
• Recruit the best talent by offering them real value: if HR is done correctly, employees get a gainful, enjoyable workplace, which makes it more likely you will attract and keep the right people.
• Nurture employee’s strengths and support their weaknesses: HR helps to recognise where an employee does and doesn’t perform well, and ensures that they are given roles where they can thrive and learn.
• Measure individual performance: a business cannot succeed unless its employees are performing well. Part of HR’s role in business is to assess and improve the feedback of the individual staff, by monitoring their performance and providing feedback and review.
• Motivation and deterrence: measures are typically put in place to incentivise effort and productivity, and disincentivise unproductive or disruptive behaviours.

Human resources and the law

There are many laws in place to protect both employees and employers. In Australia, these laws tend to favor the rights of the employee over the rights of the employer, so businesses must be careful to fulfill their obligations carefully. All new business founders have to ensure they understand the federal and state labor laws that govern wages, staff hours, overtime and record keeping.

The Australian Government provides resources for business owners, including best practice guides, here: http://www.australia.gov.au/information-and-services/jobs-and-workplace