Human resources serves as the backbone of an organization: It handles the people who prepare the plans, manage the assets and do the work for a business. HR performs a range of activities, or functions, to support the strategies mapped out by the organization. Although a May 2008 study by the Society for Human Resource Management ranked recruitment and staffing as the most critical HR function for strategic support, it found that firms with fewer than 100 employees thought differently. The study's small-business participants listed employee benefits, administration, strategic planning and legal compliance as their most critical HR functions.

Employee Benefits

An employee benefits package includes compensation, healthcare coverage, paid time off and other perks such as retirement savings. The benefits package influences HR's ability to recruit and retain employees needed to execute the organization's strategic plan. It also affects employee satisfaction and productivity that can keep the business competitive. HR performs myriad tasks within this functional activity such as provider selection, enrollment, communication and payroll processing.


HR sets the policies that workers live by while on the job and handles the related record-keeping. For instance, it tracks benefits eligibility, monitors vacation and sick pay accrual, and oversees performance reviews. Scheduling, service awards and disciplinary action represent additional administrative tasks. The job descriptions prepared by HR drive benefits eligibility, promotion qualification and hiring decisions, making them an administrative priority. reports that outsourcing administration of benefits and payroll can save businesses money and allow their human resources managers to devote more time to planning.

Strategic Planning

HR must prepare its own strategic plan to sustain that of the organization as a whole. Knowing the business's goals, limitations and operating environment, HR determines what actions it must take to ensure that it provides an adequate number of employees with the required skills when and were they are needed. Those actions may include a new lineup of work-life balance services to offer employees, social media campaigns to build "employer of choice" brand awareness, career development programs and training initiatives.

HR deals with compliance issues throughout the employment process, from posting a vacancy through termination. Federal and state laws dictate labor practices, minimum wage, required record-keeping, safety and health training and some leave benefits. Failure to verify employment eligibility through the U.S. Department of Homeland Security's I-9 form, for example, puts a company at risk for severe fines. Protecting employee privacy rights, as outlined in the Health Insurance Portability and Accountability Act of 1996, necessitates keeping any medically related documents in a separate file from each employee's personnel file. Corporate Compliance Insights' website calls HR key to a company's compliance execution.