What is Human Resources (HR)?

Human resources (HR) can be described as the part of a company responsible for finding, screening, recruiting, and training potential employees and administering employee benefits programs. HR is crucial in helping businesses cope with the ever-changing business landscape and a growing demand for high-quality employees in the 21st century.


John R. Commons, an American institutional economist, was the first to introduce “human resource,” a term he coined in 1893 “human resource” in his book “The Distribution of Wealth,” published in 1893. It wasn’t till the turn of the 20th century when HR departments were initially established and charged with addressing miscommunications between employees and employers.

Key Takeaways

  • HR (HR) can be described as the department of a firm that is responsible for finding, screening, recruiting, and training applicants for jobs and coordinating employee benefits programs.
  • Additional human resources responsibilities comprise pay and benefits, recruiting and firing, and keeping up-to-date with all laws that could be affecting the company and its employees.
  • Many businesses have shifted away from the traditional in-house human resource (HR) administrative duties and outsourcing tasks such as the payroll and benefits to outside vendors.

Understanding Human Resources

An HR department is an important element of every business, regardless of size. The HR department is responsible for increasing employees’ productivity and ensuring that the company is protected from any potential issues that might occur within the workforce. HR’s responsibilities include benefits and compensation, hiring, firing, and staying up to the latest on any laws that could affect the business as well as its workers.

The Conference Board did the research, a member-driven think tank for economics, has revealed six important HR-related tasks that HR should be able to perform to bring value to an organization effectively.

Human Resource Advantages and Disadvantages Human Resource

Benefit Payroll Integration

It is a cost-effective method to ensure employees have access to the payroll documents, including withholding forms as well as direct deposit forms. The portal also allows where employees can access pay statements and tax forms, instead of a human resource employee who must produce the documents, distribute them, and mail them the documents to employees.

Benefit: HRIS Cost

Like all new technologies, there’s a cost to license and install the new system. Costs vary, and are contingent on the features that are available in the HRIS system, however they can be up to $300 per employee for larger firms that offer a wide range of benefits. Smaller businesses can expect to pay anything from $30 to $110, and this is not including payroll processor fees.

Benefit The Employee Files

The HRIS system allows employers to keep track of all HR documents such as training and evaluations. From when a worker is hired until the moment he retires, the entire record is kept with ease of access. Managers can upload evaluation documents, and employees can keep track of the documents for benefits or employment that are not available. This eliminates a lot of paperwork from the human resources office and allows him to concentrate on better recruitment and internal development of staff.

A disadvantage: Security breach

Like any other computer technology, as well as database systems, you run a possibility that hackers can gain access to information and use it to carry out illicit motives. Employers provide employees with tax, financial, and personal data, such as emergency contact numbers. Security breaches could be devastating.

Benefits: Benefits Administration

Employers can incorporate benefits administration in HRIS platforms. Employees can now access benefits for employees like health insurance or retirement plans. Benefits administration is a different aspect that eliminates the clerical burden from HR departments, allowing them to concentrate on training staff instead of the staff members sorting and retrieving forms.

Advantage of Documents

The HRIS platform provides a way to all company-related documents to be accessible. Employee handbooks, codes of ethics, evacuation plans, and other emergency procedures are stored on the HRIS platform. If someone requires access to this information all they have to do is sign into their account, grab the file and then open it.

Differentialities between Human Resources and Human Capital

What’s the distinction between Human Resources and Human Capital?

Human capital and a human resource are tightly connected as they consider how current and future human capabilities can be utilized to achieve the highest effectiveness and profit. The primary distinction in human capital and resources represent the human potential that is extracted from the vast array of resources. Human capital refers to abilities, skills and knowledge that have been invested and used.

Human resources must be sourced to be trained, educated, and offered opportunities and challenges to realize their potential. In time the human resources will be transformed into human capital. This is human abilities, capabilities, and capabilities that have been invested in and employed in business operations, in order to produce results and output

* Human capital and human resources are two terms that are quite similar when they are referring to human abilities, capabilities, and talents that are vital to the overall success of any company.

Human capital is the abilities, skills and experience, as well as education and knowledge, as well as the know-how and skills that are being provided by human beings to businesses.

Human resources comprise the human resources pool that has capabilities, expertise, and skills that can be tapped and enhanced when needed.