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Human Resource Management: Its Relevance in Today’s Businesses (part 1)

10/05/2026

Through the years, Human Resource Management (HRM) has evolved from being the back-office support performing traditional administrative tasks into a vital role critical to the organization’s survival and growth. Not just the stereotyped cost center, human resources are now considered as a key factor in operational excellence and long-term competitive advantage (Wahitu, 2025). 


Perhaps, what differentiates the HR of today is their reference as “strategic.” The evolution of the term alongside its organizational role is pertinent in understanding where HR is right now. From Personnel Management (PM) where workforce is viewed simply as “personnel,” to Human Resource Management (HRM) where workforce is referred to as “employees,” to Strategic Human Resource Management (SHRM) which redefined HR as “capital” – an investment and asset,  and not just an operating expense (Uysal, 2013). “Strategic” in the sense that HR has been empowered to take active participation in planning and anticipating future challenges, high-level decision-making and resources allocation. The multi-dimensional significance of SHRM covers the following critical areas: 

  1. HR alignment with corporate strategy. Instead of functioning alone, strategic HR collaborates with leaders to perform environmental scanning, evaluate future labor requirements, and closely align internal personnel capabilities with organizational objectives (Alharthey, 2011). When SHRM is implemented well, it immediately creates a climate that maximizes the achievement of overall goals (Wahitu, 2025).

  2. Optimizing workforce and organizational efficiency. Optimizing employee output is one of HR's primary goals since it can benefit entire business divisions and the company as a whole (Uysal, 2013). This can be achieved through a system of functional activities that are coordinated, i.e., strategic staffing, targeted training, and total rewards.

  3. Cultivating a high-performance corporate culture and capabilities. Organizational culture, or the shared values, customs, and attitudes of the workforce, is mostly designed by HR. HR creates a peaceful and effective atmosphere by carefully choosing applicants who align with company values and consistently rewarding positive work habits (Rustiawan, 2023). Moreover, HR systems are special organizational learning catalysts. They prevent a company's competencies from stagnating by fostering team-level learning, building collective internal capabilities, and encouraging cross-functional knowledge sharing (Alharthey, 2011).  

  4. Conflict resolution and workforce balance. The HR department plays a crucial role as both an impartial mediator and an expert consultant in amicably resolving workplace conflicts (Nandhini, 2020). Moreover, HR ensures that workers feel safe, appreciated, and legally protected by striking a balance between the organization's goals and each person's unique health needs. This naturally leads to increased morale and enduring loyalty (Rustiawan, 2023). 

Can an organization operate without an HR department? 

Having outlined the significant roles of HR in an organization, one may ask, is it possible for a business to run without a legit HR department? Yes it can, as attested by what thousands of businesses do today. In the Philippines, 99.63% of all registered businesses are Micro, Small, and Medium Enterprises (MSMEs) (House of Representatives, 2025), many of which do not have dedicated HR departments because of tight budget, few employees, and the perception that HR is an additional expense that does not add value (Executive81 HR Solutions Pvt. Ltd., 2022).  

But just because you don't have an HR department doesn't imply you can run without HR functions. The actual work—hiring, paying employees, adhering to labor regulations, and settling disputes at work—does not go away. It simply gets redistributed. For example, if the company opts not to hire an HR professional, they have to choose one of the following approaches to handle the required tasks: 

  1. Founder/CEO Bootstrapping: The founders take on the HR role in early-stage firms. They individually create the first employee handbook, interview applicants, determine pay, and write job descriptions.  
  2. Fractional and Outsourced HR: Businesses frequently use fractional HR consultants or Professional Employer Organizations (PEOs). While a fractional consultant may fill in for a few hours each week to tackle complex personnel concerns or compliance, a PEO legally co-employs your workforce to handle payroll, tax filings, and benefits administration.
  3. Software Automation: By automating payroll, tax withholding, and basic onboarding paperwork, modern HR technology (Human Resource Information System (HRIS), Human Resource Management System (HRMS), and Human Capital Management (HCM)) enables non-HR managers to handle the technical aspects of employment with a few clicks. 


Operating without an HR seems to work fine at a certain point but it also exposes the company to serious risks as the business grows. For instance, in legal compliance, business owners only rely on Google or generic templates for contracts, termination and workplace policies without bothering to know if there are updates or revisions to the law that might have crucial implications to the company’s decisions. In conflict resolution, likewise, the expertise of an HR professional is pivotal in maintaining a healthy workplace free from biases, communication breakdowns, leadership gaps, and policy-practice mismatches (Bharadwaj, 2025). The HR acts as the neutral mediator in disputes as well as ensures fair outcomes (Ugoh, 2024). 

This has been a remarkably interesting topic. A continuation (part two) is in the offing. Let us know your thoughts on the subject matter and let’s have a healthy exchange. We would be glad to hear from you.   

Feel free to reach out to us at inquiry@hothousemanagement.com or hothousemgtconsultancy@gmail.com or call us at +63 9217255654 or +63 9178563548 if you have clarifications, questions or inquiries about fractional and other HR services. 


References 

  • Alharthey, B. K. & Rasli, A. (2011). Key role of strategic human resource management (SHRM) in advancing the degree of team learning. African Journal of Business Management 5(26), DOI:10.5897/AJBM11.1663. 
  • Bharadwaj, S. (2025, April). The Role of HR in Conflict Resolution at the Workplace. International Journal of Research Publications and Reviews, pp. 10099-10106. 
  • Executive81 HR Solutions Pvt. Ltd. (2022, July 13). Why MSME is not MNC Yet? www.linkedin.com, pp. https://www.linkedin.com/pulse/why-msme-mnc-yet-executive81-pvt-ltd-/. 
  • House of Representatives. (2025, August 4). House Bill No. 2895. docs.congress.hrep.online, p. https://docs.congress.hrep.online/legisdocs/basic_20/HB02895.pdf. 
  • Nandhini, B. R. & Vimala, B. S. (2020). Imperative Role of Human Resource Management in Organizational Activities. International Review of Business and Economics, Volume 4, Special Issue No. 1 pages 124-129. 
  • Rustiawan, I., Gadzali, S., Suharyat, Y., Iswadi, U., & Ausat, A. (2023). The Strategic Role of Human Resource Management in Achieving Organisational Goals. INNOVATIVE: Journal Of Social Science Research, Volume 3 Nomor 2 Tahun 2023 Page 632-642 https://doi.org/10.31004/innovative.v3i2.345. 
  • Ugoh, E. (2024, July 15). The Role of HR in Conflict Resolution and Mediation. FIC Human Resource Partners, pp. https://www.fichrpartners.com/post/the-role-of-hr-in-conflict-resolution-and-mediation. 
  • Uysal, G. (2013). SHRM: Progress and Return. China-USA Business Review, Vol. 12, No. 11, 1096-1104. 
  • Wahitu, F. H. & Muhama, G. (2025). Strategic human resource managemeng: Lived experiences. SA Journal of Human Resource Management.