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Companies Say No to Having an HR Department

Wall Street Journal (04/08/14) Lauren Weber; Rachel Feintzeig

Some companies choose not to have a human resource department, arguing that the traditional HR department curtails innovation and burdens businesses with inefficient policies and procedures. Concurrently, software is making it easier to automate or outsource certain HR tasks.

However, there are downsides to forgoing a traditional HR department. The managers that handle HR on the fly may lack specialized legal knowledge, for example, which can open the business up to lawsuits. Furthermore, if managers don’t know where to find qualified job applicants, they may lose talent to another company.