Do Organizations Really Need An HR Department?

Sometimes the only thing worse than having an HR department is not having one.

With a sudden boom in the HR software industry it has become a lot easier to automate or outsource people related processes such as attendance, payroll and benefits.

So the big question is Can We Do Away with the HR Department and can the managers take up the HR role in the organization?

This article on the Wall Street Journal caught my attention and I thought of asking you and what is your take on the subject. Another thread on LinkedIn which takes a dig on this subject is a perfect read.

In 2012, U.S. employers had a median of 1.54 HR professionals for every 100 employees, up slightly from a low of 1.24 in the recession year of 2009, according to the Society for Human Resource Management. They earn a median annualized wage of about $51,000, government statistics show.

Think of the financial and strategic risks when you consider eliminating certain portions from the HR Department.

If we study the trends of last 5-12 years, many transactional jobs such as payroll, attendance management, recruitment, on boarding and benefits are already being outsourced by companies. Sometimes it does makes sense when you can have an outsourced expert who can do these jobs faster, better and cheaper, isn’t it?

As of now we see that HR has a core role to play in any organization, but how do we justify the existence of this role in the longer run?

Can non-HR Managers be trained to make HR related decisions pertaining to employees?

Can they keep pace with the ever changing legal and statutory laws? Or can we outsource them as well?

Some companies are planning to decide on doing away with the HR departments. Will this trend grow in the coming times?

Let me hear what you think in the comments section below.

  • Dr. Ben Walton says:

    Great topic of discussion brought up by you Amit.

    Outsourcing HR functions and saving money can be one view. The company can hire a single HR manager to perform core HR functions after outsourcing manual jobs.

    However, they might have to pay for it later when a lawsuit happens because they failed to have HR in place to look out for the welfare of the employee as well as the business.

    It is well known, HR needs to be there to help with a businesses bottom line. If the business itself forgets that and tries to do away with HR, it could have terrible consequences with employee relations and morale which will affect the overall business.

    What about conflict of interest. Do you think a manager performing HR functions could be placed in a compromising situation that leads to a large lawsuit because they are performing some of the HR functions? That is a benefit of having an HR office to perform administrative duties and make decisions that are based on HR laws and other state/federally mandated policies.

    So the answer to your original question, YES companies need HR departments.

  • Helena Jackson says:

    Hi Amit,
    From my point of view, companies should think before making any hasty decision in eliminating HR department from the organization. A good strong basis has to be there for arriving at such a conclusion.
    If you ask me frankly, in my current company, there are many times when my HR manager has helped me out of the way. Even my reporting manager didn’t come forward. So I really value HR presence and their contribution.

  • Amit Bhagria says:

    Thanks Helena for appreciating the HR contributions.

  • George Matthew says:

    One of the greatest benefit of retaining the HR department is that their work is in a way linked to the branding of the company. HR goes beyond just doing transactional and legal functions

  • Dolan Jack says:

    I have nothing against people who chose Human Resource as a profession. They are entitled to their choices. However what bothers me is first, the existence of such a department in the first place and second, the holier than thou attitude shown by most of the HR ‘professionals’. If the role of the HR is limited to enhancing the employee experience, I would be OK with it. Obviously we need something like an event management group within every organization and HR fits the bill here. But extending this role to recruitment and rewards are absolutely senseless according to me. I am saying this purely in the context of technology companies – software development / electronics in particular.

  • Amit Bhagria says:

    Hi Dolan,

    HR is not just about event management. The way HR has evolved in the last 10 years there is so much more to the profession now. It has become equally challenging like any other line function. I am not sure how was your experience with your HR that has compelled you to make such an opinion about the profession. In case you can share something specific, we can try and address it appropriately.


  • John Kennedy says:

    HR is the foundation for everything. If HR is eliminated I think there will be nothing left out. If any company/institution has a success or failure it is due to the HR and it heavily depends on the HR manager. HR is the soul of any company/institute. HR has tremendously done a great job in last about 10 to 15 years and contributed a lot for the overall growth of the company, employees, employers, etc. I think he/she will be making a grave mistake if he/she even thinks of doing away with HR. HR is a silent and unnoticed job. Unfortunately some are not able to see that. So one needs to be very sure before making any hasty decision with regard to doing away with HR.

  • Mazher Rizvi says:

    The basic requirement for HR Managers was to be able to empathise, understand, interpret perceptions of human assets. Once policies and procedures were designed and implemented, it became a routine operational exercise and was taken up by HR software packages. Recruitment focus is now on web based portals so the tedious exercise of sifting through hundreds of CVs is not required. Preliminary interviews and tests may be outsourced, leaving only the final interviews to be conducted by the employers. Training, except for socialization is mostly outsourced to consultants. Performance management systems are being done online and in some cases like 360 deg. outsourced. Setting Targets and benchmarks, evaluating outcomes, counselling etc are still the domain of HR but are being devolved to the line managers. Compensation is very much on automation and is being outsourced. So where does it leave the HR Manager. The role seems to have evolved. Our survival is now at a Strategic level where decisions cannot be taken over by technology. So we need to develop ourselves to play a strategic role instead of simply a rubber stamp manager.

  • Nancy says:

    Well thinking of doing away with HR department will be a disaster to many if not all Organizations, First technology is created by human being and to a great extent are not flexible enough to understand the needs of each Organization. Human Resources involve a lot of mental work and high flexibility that technology will not be able to cope with. Secondly I don’t think it is cheap to outsource as people may think, without this department how many times will we need the outsourced services, these days we align employees career needs to the organization objectives otherwise retention would not be possible. Lastly, in change (trend), is it people or technology that comes first?. We are here to stay.

  • Lazarus Machevele says:

    A very good question for discussion. The question is interesting and I thought of framing my Masters dissertation topic around this question. I have an Honours in Human Resource Management but my Masters is in Business Management. My major problem is that the faculty wants all students to do quantitative research.
    1. How can i formulate the research topic to meet quantitative requirements?
    2. How many hypotheses can i formulate ie.

    H0- the hr department is irrelevent/ not needed in organisations today
    H1- The Hr is relevant/needed

    What do i use as the constraints if i am to run a regression to test the hupothesis e.g, recruitment, trainning, Law suits/Discplinary cases, Perfomance management etc.

    I wanted to frame my topic as, “The impact of Hr softwares on the the modern role of the Hr department: do organisations really need an HR depart?”

    After conducting my research, i will come back with informed decisons back to you guys and let you know whether organisations really need the HR department or they just want it?



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