What does a Human Resources Business do?

Felicia Dye

The primary role of a human resources business is to act as a liaison between a company or agency and its workforce. Hiring, enforcing labor laws, and managing employee benefits are a few matters a human resources business will typically handle. Sometimes these businesses are a direct part of the entity that they act on behalf of. In some instances, however, a company or agency will contract a human resources business.

A human resources manager conducting an interview.
A human resources manager conducting an interview.

For many workers, their association with a company begins with human resources. This is often the entity responsible for distributing, receiving, and processing applications. Managers of various departments or sectors of a company or agency may hold their own interviews. In many cases, however, the decision of who will work for a company is made by the human resources staff.

A human resource business may provide performance reviews.
A human resource business may provide performance reviews.

There are several hiring duties generally performed by the people working within the human resources business. They may verify employment history and references. They may also organize and confirm the results of mandatory drug testing.

A human resource business may help with the development of business contracts.
A human resource business may help with the development of business contracts.

A human resources business usually acts as a service center for those who are already employed. If any of the information normally kept in an employee’s record needs to be changed or updated, the human resources staff will likely perform those tasks. If a person needs to provide documentation from his employer for personal reasons, he can usually get it from human resources.

Calculations and management of sick leave or vacation time may be handled by the human resources staff. These people tend to deal with matters pertaining to retirement funds, taxes, and health insurance. They can also manage or oversee performance reviews and associated wage increases.

A human resources business is generally compensated by the company or agency that it works on behalf of. This does not mean that all of the decisions or actions will reflect the desires and attitudes of that company or agency. Human resources staff may have to inform a company that its behavior violates the law or an employee’s rights.

Disputes between employees or between employees and their employer may be handled by the human resources business. Human resources staff may have to demand that a company change certain policies or behaviors. When it is not possible for a solution to be reached internally, it may be the responsibility of the human resources staff to organize arbitration or mediation. It may also have to advise employees about the proper procedure to take action against the company or themselves.

Hiring duties are often performed by the people working in a human resources business.
Hiring duties are often performed by the people working in a human resources business.

You might also Like

Readers Also Love

Discussion Comments


@Latte31- Wow that sounds like a hairy situation. I know that during the dot.com phase when there was a boom in hiring in the technology field many companies called PEO’s or professional employment organizations.

These companies started to develop because of the shortages in qualified personnel. These organizations sponsored foreigners by paying their H-1 Visas while taking a cut of their earnings just like a staffing company would.

Many companies where able to hire programmers like this. I was working in the technology staffing field at the time and it was always so difficult finding enough qualified people that were also qualified to work in the United States because we could not keep up with the demand for these technology employees.

These companies did all of that work for us, so we were able to hire many more people this way.


There are many human resource businesses that specialize within one area of human resources. For example, a staffing firm will recruit and interview potential applicants that might fit one of their client’s open positions.

They also process references and perform background checks if the company requests. Sometimes even if you follow all of these steps a human resource business can still provide a client with a candidate that otherwise looks like a perfect fit for the position, but actually becomes a nightmare for the business.

For example, when I worked in the staffing field there were always some contractors that although they were considered the employees of the staffing firm would try to get hired on a permanent basis by our client essentially cutting us- the middleman out.

This is highly unethical and the contractors sign a contract stating that they won’t do this but they still do and it puts the human resource company in a difficult situation because they don’t want to lose future business from this client, but they can’t allow one of their contractors to betray them like that.

Post your comments
Forgot password?