Do we need Human Resources Function at all?

In the contemporary business ecosystem, the role and importance of the Human Resources function have become a topic of discussion. However, do we need Human Resources? As organizations strive to adapt to changing market dynamics and technological advancements, questions arise about the relevance and necessity of HR.

Traditionally, HR has been responsible for managing employee recruitment, training and development, performance evaluations, compensation and benefits, and employee relations. These functions are vital in ensuring a productive workforce and maintaining a positive work environment. However, with advancements in technology such as automation and artificial intelligence (AI), some argue that certain HR tasks can be automated or outsourced.

Proponents of this view argue that AI can efficiently handle routine administrative tasks such as payroll processing or benefits administration. This would free up HR professionals to focus on more strategic initiatives like talent management, succession planning, organizational development, and fostering a strong company culture.

On the other hand, skeptics question whether AI can truly replicate the human touch required in certain aspects of HR. Building relationships with employees, addressing their concerns or grievances empathetically, and providing personalized support are seen as crucial elements that AI may struggle to emulate effectively.

Moreover, human judgement is often deemed essential when it comes to making complex decisions related to hiring or resolving conflicts within teams. The ability to discern nuances in interpersonal dynamics or interpret non-verbal cues are skills typically associated with human judgment rather than AI algorithms.

Ultimately, while technology undoubtedly plays an increasingly significant role in streamlining various HR processes, it is important to strike a balance between automation and human involvement. Leveraging technology can undoubtedly enhance efficiency within the HR function; however,the unique perspective and personal touch offered by human resources professionals should not be underestimated or undervalued. By combining technological advancements with strategic human insight,it is possible for organizations to optimize their HR function for success in today’s dynamic business landscape.

From shareholders to job applicants, perspectives vary on the importance and impact of HR. To evaluate the significance of HR, let’s navigate through its implications from various stakeholders’ viewpoints and weigh its pros and cons.

1. Shareholder’s Perspective

From a shareholder’s perspective, the HR function serves as a protective bulwark and a growth catalyst for a company. An efficient HR department plays a pivotal role in risk management, shielding the organization from potential legal repercussions, which could erode shareholder value. Furthermore, HR’s involvement in strategic talent management ensures that the company attracts, nurtures, and retains top-tier talent, directly influencing innovation, efficiency, and growth.

While the associated costs of maintaining a comprehensive HR department might seem like a concern, the long-term returns in terms of reduced liabilities and enhanced organizational performance are seen as significant dividends that safeguard and potentially increase shareholder investments.

Why Shareholders Might Advocate for HR:

  • Risk Management: An efficient HR function minimizes potential risks related to legal issues, including employment discrimination, wrongful termination, and workplace safety. Protecting the company from lawsuits and legal repercussions directly safeguards shareholder value.
  • Strategic Talent Management: HR plays a crucial role in ensuring the right talent is attracted, retained, and developed. Talented employees drive innovation, efficiency, and growth, all of which contribute to positive shareholder returns.
  • Optimal Organizational Culture: An effective HR ensures the company’s culture is in line with its vision and mission. A positive culture can increase employee motivation, reducing turnover costs, and enhancing overall productivity.

Why Shareholders Might Be Skeptical:

  • Cost Implications: Maintaining a full-fledged HR department entails costs. From HR technologies to payroll and training expenses, shareholders might see these as detracting from potential dividends.

2. Leader’s Perspective

From a leader’s perspective, the HR function emerges as an indispensable strategic partner in shaping and steering the organization’s trajectory. Beyond the traditional roles of recruitment and employee relations, modern HR collaborates closely with leadership in strategic planning, ensuring that talent strategies harmoniously align with overarching business goals.

During moments of pivotal organizational change, be it mergers, acquisitions, or restructuring, HR provides invaluable support, ensuring transitions are smooth, morale remains intact, and disruptions are minimal. While there’s a cautionary note on potential bureaucratic delays, the broader view recognizes HR as a key contributor to organizational coherence, agility, and vision realization.

Why Leaders Advocate for HR:

  • Strategic Partnering: HR isn’t just about recruitment or employee grievances. Modern HR professionals collaborate with leaders in strategic planning, helping shape the company’s direction by aligning talent strategy with business goals.
  • Change Management: In times of organizational change, HR is instrumental in ensuring smooth transitions, from mergers and acquisitions to restructuring, ensuring minimal disruptions and morale dips.

Why Leaders Might Be Skeptical:

  • Perceived Bureaucracy: Some leaders feel HR introduces unnecessary bureaucracy, slowing down processes and hindering agility.

3. Manager’s Perspective

From a manager’s perspective, the HR function serves as a crucial support system, facilitating the effective management and development of their teams. HR provides invaluable resources in training and development, ensuring that teams are equipped with the necessary skills to excel. Moreover, when conflicts or disputes arise, HR offers essential mediation and conflict resolution services, enabling managers to maintain team cohesion and focus on core operational tasks.

The presence of robust performance management systems introduced by HR aids in the consistent evaluation and enhancement of team efficiency. While there may be concerns about occasional procedural delays, the overarching sentiment is that HR is instrumental in streamlining managerial responsibilities and optimizing team performance.

Why Managers Advocate for HR:

  • Training & Development: HR departments provide training and development opportunities, ensuring managers have skilled teams, which makes achieving departmental goals smoother.
  • Conflict Resolution: Managers often face inter-departmental conflicts or team disputes. HR offers mediation and conflict resolution services, freeing managers to focus on core responsibilities.
  • Performance Management: HR introduces and maintains robust performance management systems, allowing managers to evaluate and improve their teams’ effectiveness.

Why Managers Might Be Skeptical:

  • Process Delays: Some managers feel that HR procedures, especially regarding hiring or addressing grievances, can be prolonged and cumbersome.

4. Employee’s Perspective

From an employee’s vantage point, the HR function stands as both a protector and advocate. HR ensures that the rights of employees are upheld, fostering a safe and equitable working environment. It acts as a bridge between management and staff, providing a platform for voicing concerns and seeking resolutions. Furthermore, with HR’s emphasis on performance evaluations, feedback mechanisms, and training programs, employees find opportunities for personal and professional growth.

While there can be feelings of disconnect in larger organizations, where HR may appear distant, the broader understanding is that HR plays a pivotal role in enhancing the employee experience, safeguarding rights, and facilitating career advancement.

Why Employees Advocate for HR:

  • Advocacy: HR acts as an advocate for employees, ensuring their rights are protected, and they have a platform to voice concerns.
  • Career Growth: Through performance evaluations, feedback mechanisms, and training programs, HR aids employees in personal and professional development.
  • Benefits Administration: HR manages compensation, benefits, and other perks, ensuring employees receive their rightful dues timely and accurately.

Why Employees Might Be Skeptical:

  • Impersonality: In larger organizations, HR might seem distant or impersonal, leading to feelings of disconnect or neglect among employees.

5. Job Applicant’s Perspective

From a job applicant’s perspective, the HR function represents the gateway to an organization, guiding them through the intricacies of the hiring process. HR ensures a structured and transparent recruitment procedure, setting clear expectations, and often providing feedback that aids in professional growth. Once selected, HR’s role in onboarding becomes vital, helping newcomers integrate and acclimate to the company’s ethos.

However, there’s an underlying sentiment among some applicants that HR-driven processes can sometimes feel rigid or impersonal. Nevertheless, most recognize that a proficient HR department ensures fairness, consistency, and a smoother transition into new roles.

Why Job Applicants Advocate for HR:

  • Structured Hiring: HR ensures a structured recruitment process, providing clear communication, timelines, and feedback, enhancing the candidate experience.
  • Onboarding: HR facilitates seamless onboarding, helping new hires acclimate and integrate into the company culture.

Why Job Applicants Might Be Skeptical:

  • Rigid Procedures: Some candidates find HR-driven recruitment processes to be rigid and inflexible, lacking the human touch.

Pros and Cons of Having an HR Function

In the ever-evolving landscape of business management, organizations constantly evaluate the structure and utility of their internal functions. Among these, the role of the Human Resources department often comes under scrutiny. As a linchpin in managing an organization’s most valuable asset—its people—the HR function plays a multifaceted role, influencing everything from talent acquisition and professional development to organizational culture and compliance.

However, like any integral business component, the HR function brings with it a series of advantages and potential drawbacks. On one hand, it acts as a cornerstone for organizational stability, ensuring systematic recruitment, clear communication, employee welfare, and adherence to legal mandates. On the other hand, concerns arise about its cost implications, potential bureaucratic roadblocks, and the challenge of maintaining a personalized touch in larger corporate settings.

As businesses grow and adapt in the face of changing market dynamics, technological advances, and shifting work cultures, the conversation around the necessity and effectiveness of HR becomes increasingly pertinent. Delving into the pros and cons of having an HR function offers valuable insights, allowing organizations to optimize their approach to human capital management, aligning it more closely with their overarching strategic goals.


  • Structured Systems: HR introduces standardized systems for everything, from recruitment to appraisals, ensuring consistency and fairness.
  • Legal Compliance: HR ensures adherence to employment laws, protecting the organization from potential legal pitfalls.
  • Employee Development: With focus on training and development, HR aids in nurturing and growing a company’s talent pool.


  • Potential Bureaucracy: If not efficiently managed, HR can introduce layers of bureaucracy, hampering decision-making speed.
  • Costs: Running an HR department, especially with top-notch tools and technologies, can be costly.

The need for an HR function varies based on company size, industry, and culture. While smaller startups might manage without a full-fledged HR department for a while, as organizations grow, the complexities of managing human capital increase. For most companies, the benefits of an effective HR function outweigh the cons, provided it’s aligned with business goals and remains agile and responsive to evolving organizational needs. We hope this gave you an answer to the question – Do we need HR at all?

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