Human resources departments in 2024

Human resources is responsible for attracting and managing the company’s talent. The department’s main functions include:
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• Staff recruitment and selection.
  
• Onboarding of new recruits.
• Staff training and development.
• Managing salaries, benefits and allowances.
• Absence, annual leave and time-off tracking.
• Employee performance evaluation.
• Creation of well-being policies.
• Creation of career paths and promotions.

In order to perform all these tasks, it’s essential to build a team of specialists. The number of team members will vary according to the size of the company, however (we’ll discuss this a little later). The main job roles in human resources are:

Soft skills and hard skills are abilities that make us unique as professionals. The first relate to social aspects, such as empathy or the negotiation skills; the second are purely technical and are related to the knowledge we offer to carry out a specific role.
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Soft skills are the most sought-after skills for human resources although a certain educational background is also required. Some of the most important skills include:

The most important steps to follow when building a human resources department are:
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1. Work on creating a company culture
Before you start to recruit new members for your team, create and spread a company culture within your organisation. Establish values and beliefs that define the entire workforce and make them special. This will make it much easier to find people that fit into the company.
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2. Carry out selection processes
Choose professionals that are a better fit for your company and culture and that also possess the skills required for the job. Finding a balance is vital, as it’s pointless finding a professional who is highly competent at their job but who is not aligned with the company’s philosophy. Below is a checklist that may help you in this process:
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3. Align yourself with other departments
A successful HR department needs to work closely with the other areas. Arrange a kickoff meeting to align strategies, and then set up regular review meetings to enhance communication and teamwork.

4. Strive for continual improvement
Don’t stand still and always try to deliver the best results, optimise processes and keep up to date with new trends in the sector and the labour market. Success in HR means continuous improvement.
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5. Make technology your ally
Technology is an indispensable member of your HR team. Choose a software that helps you automate tasks, optimise processes and save time, so that you can focus on what’s really important: people. There are two types of software: desktop and cloud based. The first are “traditional” software that are downloaded and installed on your computer; the second, however, use cloud technology that enables you to connect from anywhere and work with ease.

Size is a common query that arises when building a human resources department; in other words, “how many professionals do you need to manage a certain number of people?”

Contrary to what you might think, the HR-to-employee ratio is higher in small companies. This study reveals that SMEs need larger teams than big companies, as the latter have economies of scale in their favour. The general average is at 2.57 HR professionals per 100 employees, but this can be further refined according on the size of the company:

This therefore shows that a minimum number of professionals is required to carry out certain tasks. When the workforce reaches a certain size, however, the HR department doesn’t grow at the same pace. 
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What are the reasons for these parameters? There are several:

• Firstly, while the proportion may be smaller, large companies will always have more people in their HR department. They have more resources and, therefore, more flexibility to compensate the workload and distribute the resources.
• HR professionals in larger companies tend to be specialised in one area which makes them much more efficient and productive. In contrast, smaller companies usually have one person who deals with several tasks, and which requires a lot more effort.
• In larger companies with more generous budgets, there are proportionally less people in the HR team as they can afford to outsource certain tasks. When this happens, the HR-to-employee ratio tends to decrease while real costs usually increase.

When a personnel department has two or more people, there must be an organisational method; in other words, who does what and which is the optimum way of doing these tasks? While each company will find the model that suits their needs, there are certain setups or proven structures:

1. Structure for a department of two people

In a department of two people, one of them will logically be the HR manager. There are two options for the second person: hire an assistant or a recruitment specialist. In the first scenario, the manager deals with strategic aspects and the assistant, with more administrative tasks; in the second scenario, the recruitment specialist looks after all selection processes. The latter model makes particular sense in a company with a high staff turnover.

2. Structure for a department of three people

When a department grows to three people, you don’t have to choose: hire a recruitment specialist and an assistant. This is the structure that’s best suited to most companies. Many have experts in culture or development when the company reaches between 50 to 80 employees, because these are important areas. But these needs can also be outsourced if they aren’t on the top of your priority list.

3. Structure for a department of six people

As the department grows, the best advice would be to hire specialists to carry out specific functions, and which are already related to the company’s main objectives. Above you can see an example of a six-person department in which everyone has specific tasks:

• HR Manager: handles strategy and approves all the important decisions alongside company directors.
• Recruitment manager: designs and carries out selection processes, reviews CV, performs interviews and selects candidates.
• Employee relations manager: carries out the onboarding process, performance appraisals and mediates in possible conflicts in the company.
• Compensation manager: creates compensation programmes, manages payroll and ensures that everyone is paid on time.
• Training manager: works directly with department managers to implement training programmes.
• Compliance manager: their role is to ensure that all employees comply with health and safety regulations and the appropriate medical checks.

It’s also worth mentioning that this model enables managers to have an assistant to help them with their tasks: similarly, the manager could have an assistant manager who monitors the department’s works in closer detail.

We’d also like to share two organisational structure models for large companies:

New models that aim to continually improve human resources management are arising and present interesting solutions for departments today. One of these is by Idalberto Chiavenato (2002) who analyses human resources administration as a process formed by interdependent subsystems integrated with each other:

It’s also worth mentioning the Competency management model that guarantees that the most appropriate person is assigned a specific task, according to their abilities, to take responsibility for the resulting duties. The aim is to secure the company’s success by analysing the reality of the business and the human resources available.

This model offers certain advantages:

• Identifies weak spots in a specific area.
• Obtains reliable results by using a measurable evaluation method.
• Increases employee efficiency.
• Fosters a pleasant working climate.
• Reduces absenteeism and the employee turnover rate.
• Improve the organisation’s general performance.

• Training and development.
• Career paths and promotions.
• Remuneration policies.

The strategic role of human resources obliges the department to define its own strategy and contribute to overall objectives through the organisation’s human capital. We’d like to suggest 10 steps for defining and executing an effective strategy, as well as developing and providing services you need for company growth.

1. Understand the company strategy

With this in mind, there are three types of strategy that can be applied:

2. Define the HR strategy

Create a roadmap that describes how the organisation will make the most of its human talent to face challenges and reach established objectives. In other words:

• Translate the organisation’s strategy into one which is adapted to HR’s vision and skills, set priorities and create an effective and feasible business plan.
• Define the HR strategy through initiatives, programmes and key people.
• Identify the best ways to attract, motivate and retain the different segments of the workforce.
  

3. Segment the different HR audiences  

Identify the critical human capital segments in the company and create specific programmes and services. For example, define which people or teams are key when achieving established objectives and assess their needs to create and adapt programmes and services accordingly.

4. Prioritise investment

The HR Department usually has an annual budget to manage and allocate. Make sure you prioritise investments by identifying all the department’s forthcoming projects, the costs and the benefits. This will enable you to allocate adequate funds to each one.
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It’s also advisable to:

• Identify and develop criteria for prioritising investment and make sure that they are in alignment with company objectives.
• Analyse the cost, benefit and risk of every project.

5. Design services for HR audiences

Design and implement solutions that will prove critical when ensuring the effective implementation of the human resources strategy. You can do this by analysing all the departmental processes and identifying those that could be optimised or redesigned. In addition, review your current service offering and see if you need to add new solutions.

6. Guarantee a service delivery model

Design an adapted service delivery model for human resources. To do this:

• Analyse your current model and gauge whether it can effectively satisfy the organisation’s needs and objectives.
• Define specific roles and delivery options.
• Identify key systems, processes and infrastructure.

7. Establish the appropriate HR skills

Identify and develop the necessary skills, competencies and capacities that enable HR to fulfil its strategic role within the company. In addition, analyse the specific skills that need to be developed for creating training or recruitment plans to fill the most critical gaps.

8. Constantly improve the department’s operational excellence

Design support tools, new processes, etc., to help the HR team succeed in their daily tasks. Assess the efficiency of current activities and services with the help of KPIs and specific dashboards to detect areas for improvement.

9. Build HR branding

Understand and communicate the value of the personnel department within the company. You can achieve this by developing and implementing a communication plan and seek qualitative feedback.

10. Measure the impact of HR products and branding

Identify the most important KPIs to monitor the department’s performance and return on investment. This will enable you to:

In short, design a dashboard to analyse the impact of HR, the value generated, and the costs incurred.

As we’ve just seen, the measures carried out by HR must be backed by a defined strategy that is aligned with both the objectives of the department and the company. This plan could be represented via a conventional document or a strategic map that, in a more visual format, gives you a clear, at-a-glance understanding of how HR measures connect with company objectives.

What is a human resources strategic map?

They say a picture’s worth a thousand words and, when talking about strategic maps, it’s true. This tool is a visual representation of a strategy or an organisation, or one of the areas within it. It describes the measures and decisions that are to be taken to improve the company’s positioning and reach its objectives.

As this video explains, to make one you just need a page and a diagram that shows objectives and measures, then connect them to each other according to their cause and effect. Rows are normally created for each important objective and within them, secondary targets are added into an oval shape. Arrows are then drawn to join these objectives to illustrate how they are interconnected. You can also use colours (red, green and yellow) to indicate the status of each objective.

The example below shows the strategic map of a non-profit organisation. Their main objective is that their clients are satisfied, and to achieve this they also need to ensure their volunteers are satisfied. That their workers feel like part of the team. They need to work on three areas to achieve this: recruitment, training and commitment. Specific tasks have been assigned in each of the three areas.

Why use a HR strategy map?

Having clear and well-presented objectives will help you reach them with greater ease. That’s why using a strategy map offers significant benefits. Here we’ve listed just a few:

Ultimately, this is an extremely useful tool for any company.

We’ve discussed how to create a company strategy but there is one area of this which is critically important, and therefore deserves a chapter of their own: the objectives. The targets of a human resources department usually depend on the overall company strategy. If, for example, the company plans to expand to new markets, the department’s success will be measured by its ability to create a suitable team for this purpose with the minimum costs.
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These are specific objectives, but all HR departments tend to work towards general objectives. Some of the most important of these are:

• Align company strategy with HR Human resources must align its actions with company strategy to help it meet its overall objectives.
• Attract and retain the best talent: a company’s success depends on its human capital. The HR Department must find the best professionals and retain them in the long term.
• Guarantee a good workplace climate: employee well-being is closely linked to productivity, so a satisfied and motivated team will offer better results than one that isn’t.
• Look after your employer branding: an organisation with an attractive company culture will, in turn, have an interesting employer branding and will more easily attract talent.

• Specific: a KPI should refer to a specific task or action. For example: reduce the rate of employee absenteeism by 2%.
• Measurable: if it can’t be measured, then we cannot interpret the data nor use specific tools to do so.
• Achievable: the KPI objectives you set must be achievable under the conditions you have.
• Relevant: it’s also important to ensure that the metrics you choose are relevant to your business and that they add valuable information.
• Timely: finally, each KPI must be limited to a time period and be subject to regular reviews.

Once you have your strategy and objectives, you need to monitor them to check you’re on the right track. Why? HR’s strategic importance has led to a series of consequences, and among those is a growing interest in the results of measures implemented and obtaining valuable information that enables the company make better decisions. To do this, the HR sector has started working with KPIs. In other words, performance indicators that enable you to evaluate the department’s work.

We can dig much deeper into human resources KPIs. The most important thing is that each company finds metrics that are the most useful to them, and a long-term model that enables them to get a historic record and monitor the measures they carry out.
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Once you’ve chosen them, it’s also vital to create a dashboard that enables you to understand, at a glance, at which point the department currently finds itself and its progress in relation to the established objectives. There is a multitude of options, but this one suggested by Deloitte is particularly interesting:

They call it the HR Scorecard and they use this dashboard as a tool to measure HR’s contribution the organisation’s overall performance. It therefore includes key indicators on return on investments and the different measures taken. In addition to including a description of every KPI, it also includes a column with the objective, the result and the variance. In this case, the results are positive, so they are marked in green.

Human resources departments have evolved significantly since companies started to proactively manage staff during the Industrial Revolution. Workers were seen as a cost to be minimised at that time, and all efforts were focused on towards this, as well as control and discipline.
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However, this area has gradually become more modernised and gained new functions. In the beginning they were extremely limited, managing only payroll, recruiting and administrative tasks; over time, however, the HR Department has adopted a more influential and leading role in company strategy.
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This picture illustrates the different stages through which HR departments have passed and the dynamics that were common at every stage.

Human resources departments nowadays are experiencing huge transformation on many levels but, above all, in terms of their role within the company. In fact, many organisations have decided to change the department’s name to reflect this new vision: People management, People and values, Talent management...

Outsourcing HR involves contracting a company to do the tasks this department would normally carry out. When should you opt for this model? It depends on the situation and the size of the company:

Some of the advantages of this model are:

• Reduces in salary costs, recruitment, etc.
• Less mistakes as the work is being carried out by experts.
• Improves the quality of new recruits.
• Increases business competitiveness.
• Improvements in service quality.
• More free time to spend on more important tasks.

• Loss of control.
• The impact on the employer/employee relationship.
• Loss of flexibility.

The labour market is changing by leaps and bounds, bringing with it new ways of working and managing talent. HR departments are faced with the great responsibility of adapting to these new times and ensuring that their work contributes to the company’s success. SomeHR statisticsstate that 70% of the professional surveyed are willing to invest in digital solutions for the HR department. In Kenjo, we have seen many professionals stop using excel files to track time off and attendance to start using digital HR software.