The globalisation and the resultant opening of the economy brought with it many changes to the functions of various managerial roles. Additions of new responsibilities were made to make the companies more competent to meet the challenges put before it headlong. The human resource was one area which had seen a great transition in its function. Many human resource activities like payroll processing, etc were outsourced by a few to other companies. This gave the HR department the opportunity to explore activities that add to the profitability of the concern.

HR and business HR perform more or less the same functions, but with a different objective in mind. HR perform the normal human resource functions like recruiting the candidates with the right skill as and when required, providing them with the training to aid them perform their functions efficiently and effectively, identifying and introducing competitive pay packages, initiating and modifying the employee policies and procedures to suit the environment, retention policies, disciplinary policies and code of conduct, etc that are inevitable for the smooth functioning of the activities.

The aim of business HR, on the other hand, is to make policies that add to the profitability of the concern. All actions and modifications are conducted with the intention of adding value to the business. It is the task of the business HR to modify changes to the existing policies to retain the employees who play a key role in adding to the customer satisfaction. The top reasons that make the people change jobs vary from company to company and from year to year. Keeping track of the needs of the employees is inevitable to ensure the retention of the employees. Attrition of the employees can hit the business revenue as the recruitment of the new employees, his training, the time taken for him to break even, the time lag in the task, the impact on the morale of the team members, etc have a huge impact on the revenue generation. The changes in the policies in accordance to the needs of the employee can go a long way in retaining the employees.

Similarly, the HR, while defining its pay structure to be followed in different countries, have to take into account the cost of living, the laws applicable and other factors that can have an impact to the revenue generation without compromising on the company good will. For instance, countries like Belgium has the minimum salary that is to be paid to the employees specified. To reduce the impact it has on the company revenue, many companies send the employees on a business visa for a term of three months or so as this does not come under the umbrella of the salary specifications. At the same time the business HR has to ensure that it permits a decent standard of living through the allowance even if the project fails to generate the desired income.

All activities of the business HR are directed to adding value to the business, whereas, the HR aims at drafting better policies for the creation of a healthy environment to work with.