What is HR Management and why ALL Businesses need it!
Sally Dillon • February 28, 2023
What is Human Resource Management and Why ALL Businesses (including small and medium) need it.
HRM is one of the most misunderstood, and most valuable parts of business. It is so much more than Recruitment or someone helping out with training of new staff.
According to Storey (1995), HRM is a distinctive approach to employment management that tries to achieve a competitive advantage through the strategic deployment of a highly committed and capable workforce using an integrated array of cultural, structural, and personnel techniques. If done right, HRM can actually save you time, save you money, increase your business and people's productivity and efficiency and ensure your people are healthy and happy.
HRM functions should be approached as part of your business strategy. It is also not a task for just one person (even if you have in-house HR resources), but shared across the business leadership and support staff as well as any in-hour or outsourced HR support. Below I have highlighted the 12 key functions of HRM, with each function is critical in helping move your organisation forward:
- Human Resource Planning - having the right people in the right place at the right time.
- Recruitment and Selection - attracting and keeping the best people.
- Performance Management - proactively ensuring that employees stay productive and engaged - not just taking action when someone is underperforming.
- Learning and Development - enabling employees to develop the skills and capability to meet the future needs of the business.
- Career Planning - Showing employees how their ambition can align with the future of the business to engage and retain them
- Function Evaluation - comparing various parts of the business to ensure it’s successful at a strategic level and with product/service delivery and support.
- Rewards and Recognition - is integral in attracting and retaining great staff.
- Industrial Relations - managing employment issues and the employment relationship between the business and its staff.
- Employee Participation and Communication - ensuring employees are informed and heard on various topics related to employees and the business at large.
- Work, Health and Safety - creating and implementing processes and programs that support the physical and mental health of employees and measuring the success of these.
- Personal Wellbeing - proactively supporting and promoting emotional, mental, physical, and financial well-being so they can do their best work.
- Administrative Responsibilities - HR policies, processes and systems including promotions, discipline, performance improvement, compliance, diversity and inclusion, bullying and harassment etc.
How many of these is your business doing well? Are you doing everything you can to enhance your business performance through your people?
There is a range of ways that outsourcing your HR can help you create an awesome Human Resources/People Strategy, as well as help you upskill your managers and implement practical tools and resources that help you improve your workplace culture, customer experience and your bottom line, without the cost of full time in-house staff.
Book a discovery call with us now to find out how we can help you!
Can ChatGPT Replace HR? The Risks of AI-Generated HR Advice
AI tools like ChatGPT are revolutionizing the workplace, but can they handle complex HR decisions, employee issues, or legal compliance? The short answer—not safely.
Businesses that rely on AI for terminations, pay rates, workplace investigations, or employment contracts risk costly legal mistakes, financial penalties, and reputational damage. HR isn’t just about policies—it’s about human behavior, legal nuance, and ethical decision-making—things AI simply doesn’t understand.
In this article, we explore real-world examples of AI-generated HR blunders and the hidden risks of trusting ChatGPT for critical people management decisions. Plus, we share insights on where AI can help—and where it absolutely shouldn’t.
Read on to protect your business from HR disasters.
Introduction HR is one of the most misunderstood roles in business. Some believe HR exists to protect employees. Others think HR’s sole job is to defend the company. Both are wrong. And this misunderstanding is costing businesses money, trust, and talent. For over two decades, I’ve seen organisations sideline HR - treating them as a policy enforcer or an afterthought. The result? 🚨 Employees don’t trust HR. 🚨 Leaders fail to leverage HR strategically. 🚨 Businesses struggle with culture, retention, and performance. But here’s the truth: HR isn’t about sides. It’s about solutions. Great HR drives business outcomes by balancing people and performance. The question is: Are you using HR to its full potential? HR as a Strategic Powerhouse, Not Just a Policy Enforcer The best businesses don’t just "have" an HR department. They embed HR into leadership decisions. HR isn’t just about hiring, firing, and compliance - it’s about: ✅ Shaping culture and engagement (which directly impacts performance). ✅ Developing leadership capabilities (to create stronger teams). ✅ Driving strategic workforce planning (so you have the right people, in the right roles, at the right time). ✅ Maximising financial impact - because people are both your biggest cost and your greatest asset. If your HR function isn’t influencing leadership, growth, and profitability , you're leaving money on the table. HR as a Key Voice on Your Leadership Team Many leadership teams still treat HR as a support function rather than a core business driver. That’s a mistake. Your Chief People Officer (CPO) or HR Director should have the same level of influence as your CFO, COO, or Head of Sales. Why? Because your people strategy IS your business strategy. 🔹 You wouldn’t make financial decisions without consulting your CFO. 🔹 You wouldn’t make operational changes without your COO’s input. 🔹 So why make leadership and talent decisions without HR at the table ? And yet, in many businesses, HR reports to finance, operations, or admin - departments that have their own agenda when it comes to assessing people needs, budgets, and workforce requirements. HR should report directly to the CEO, or Business Owner to ensure people strategy is aligned with business strategy - not just budget constraints or operational efficiency. Because when HR is filtered through another department’s lens, critical workforce decisions become secondary to financial targets, logistical priorities, or admin processes. If your HR leader doesn’t report directly to the top, you may be unknowingly limiting their ability to drive real business outcomes. Are You Using HR to Its Full Potential? Take a moment and ask yourself: ❓ If you have an in-house HR team, are you using their skills and expertise across all areas of your business? Or are they stuck in admin-heavy tasks, when they could be driving strategic initiatives? ❓ If you’re a small or medium business and don’t have in-house HR, why haven’t you partnered with an external consultant? What’s stopping you from leveraging the expertise that could transform your business? In larger businesses, HR should go beyond just ‘HR.’ Under an expanded People & Culture framework, HR should oversee: ✔ Training & Development – ensuring leaders and employees are constantly upskilling. ✔ Work Health & Safety – making compliance, risk management, and employee wellbeing a priority. ✔ Recruitment & Talent Strategy – not just filling roles but attracting and retaining top performers. ✔ Major Projects & Change Management – ensuring workforce alignment with organisational shifts. In smaller businesses , these functions can be outsourced or strategically managed by an external HR consultant working directly with the business owner. This ensures a strong, aligned people strategy, while certain operational roles (finance, admin, or operations) may take on specific HR tasks - as long as they receive the right training, support, and strategic direction. HR isn’t just a department - it’s an investment in your business’s future. Whether in-house or external, make sure your HR function is working at a strategic level, not just buried in paperwork. HR’s Impact on the Bottom Line People aren’t just a cost centre - they are a profit driver. 📊 Labour is often one of the largest expenses in a business - so managing it strategically impacts profitability. 📊 Engaged employees are 23% more profitable , according to Gallup. 📊 Turnover costs 50-200% of an employee’s salary - losing top talent is expensive. When HR has a strategic voice in leadership , businesses see: ✔ Stronger alignment between business goals and people strategy. ✔ Faster, smarter hiring that supports growth. ✔ Better leadership development , reducing costly turnover. ✔ More effective workforce planning , so salaries, training, and hiring are investments—not wasted costs. Final Thought: HR is Not a Department - It’s a Business Growth Lever If your HR function feels like a compliance department , you’re doing it wrong. HR should be a leadership asset , helping your business make smarter, people-focused decisions. So, here’s my challenge to you: 📌 If you’re a CEO or MD - bring HR into the strategy conversation early and often. 📌 If you’re a leader - use HR as a coaching and development resource, not just a policy checker or problem fixer. 📌 If you’re in HR - push for a strategic role in leadership, not just operational support. Because when HR and leadership align , businesses don’t just succeed. They thrive. Want to Develop Stronger, More Strategic Leaders? If you’re serious about building leadership capability in your business, let’s talk. My Leadership Dynamics Accellerator Program helps CEOs, Business Owners, Leaders and HR teams create high-performing leaders who know how to balance people and performance. 📅 Book a free leadership triage call to see how we can help here . 🚀 Save your spot in our next Leadership Dynamics Accelerator Program here . 📩 Send us an email for more information here . Let’s build something stronger - together.
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