PeopleOps vs. HR: Which team is right for your business?

The terms “people operations” and “human resources” are often used interchangeably, but there are distinctions between the two. While both functions deal with management of the workforce, they have many differences in their philosophies and approaches. Understanding these differences is crucial for businesses to make informed decisions about the right team to support their organizational goals. 

Let’s explore the key differences between people operations and human resources, and understand how to choose the right team for your company.  

Understanding people operations

People operations, commonly known as PeopleOps, is an employee-first approach to managing human resources. This approach is focused on aligning a company’s workforce strategy with its overall business strategy. With a data-driven, holistic approach, the PeopleOps model aims to create an employee-centric workplace culture and improve employee experience.

At its core, PeopleOps highlights building a strong relationship between employees and the employer, fostering a sense of belongingness and prioritizing their growth and development. It goes beyond traditional HR functions and encompasses a wide range of activities, including recruitment, onboarding, performance management, DE&I initiatives, learning and development, employee engagement and employee well-being.

Andrew Gobran, PeopleOps manager at Doist, stresses this in a Forbes article, “PeopleOps represents a shift in the way companies understand the value of their employees. In the past, employees were seen as resources that are paid to do a job (and could be replaced if no longer useful). However, there has been a growing realization within organizations that their people are actually their competitive advantage.”

Often working cross-functionally, the PeopleOps team works closely with other departments including finance, marketing and operations to ensure that people practices are in sync with the business’s overall goals and values. The team focuses on creating an inclusive work environment that empowers employees to thrive, driving overall business success. 

Salient features of PeopleOps are: 

1. PeopleOps takes a more strategic approach to managing the workforce as it stresses aligning people practices with business objectives. 

2. PeopleOps personnel proactively seek ways to improve employee engagement, experience and productivity. They also focus on developing a work culture that enhances employee well-being and fosters professional growth. 

3. This approach relies on data and analytics to guide decision-making, using metrics to measure employee performance, satisfaction and organizational effectiveness. 

4. It takes a holistic view of the employee lifecycle, from attraction and recruitment to development and retention. PeopleOps aims to optimize each stage for maximum employee value. 

5. The PeopleOps team focuses on continuous improvement, constantly evolving policies, processes and programs to create a positive and high-performing work environment. 

Defining HR

Compared to the more modern PeopleOps approach, HR is a more traditional term that refers to the function responsible for managing the employment lifecycle of an organization’s workforce. HR primarily focuses on administrative tasks, compliance, policies and procedures related to employment. It manages payroll, benefits administration, maintains employee records and ensures that the firm is compliant with labor laws. 

Key features of traditional HR are: 

1. HR has conventionally addressed administrative tasks such as recruitment, managing employee benefits, payroll, training and development, and legal compliance. 

2. HR personnel usually focus on employee relations, ensuring compliance with labor laws, resolving conflicts and addressing employee concerns by conducting investigations and taking disciplinary actions. 

3. The HR team is also responsible for developing and implementing company policies, procedures and employment contracts to ensure legal compliance and consistency. 

Highlighting the differences between PeopleOps and HR

Toggl’s Evelin Andrespok mentions in the Forbes article, “The primary difference between People Ops and HR is not so much in the daily tasks, but in the approach to members of a team. People Ops aims to understand employees holistically as individual contributors while the traditional HR mindset views them more as a resource to be calculated and managed for efficiency.”

PeopleOps and HR are both functions within organizations that deal with managing and supporting employees. While there is some overlap in their roles and responsibilities, there are key differences between the two:  

1. PeopleOps usually takes a more strategic, employee-centric approach. It emphasizes creating a positive work culture that fosters employee engagement and development, and aligns people strategies with the overall business objectives.  

HR, on the other hand, focuses on administrative tasks such as payroll, benefits administration, compliance with labor laws and handling employee relations issues. 

2. PeopleOps often encompasses a broader set of responsibilities compared to traditional HR. It includes functions such as talent acquisition, onboarding, performance management, employee engagement, learning and development, and organizational development.  

While HR may also cover some of these areas, it tends to be more traditional in nature, with an emphasis on policies, compliance and administrative tasks. 

3. PeopleOps often takes a proactive and strategic outlook to managing the workforce. It seeks to anticipate and address the needs of employees and create an environment that promotes productivity and growth. This can comprise initiatives such as fostering diversity and inclusion, designing career development programs, implementing employee feedback mechanisms and driving cultural change.  

HR instead focuses more on reactive measures, addressing issues as they arise and ensuring compliance with legal requirements. 

4. PeopleOps typically embraces a more employee-centric mindset, considering employees as valued assets and focusing on their overall experience within the company. The focus is on building an inclusive and productive work environment, promoting employee well-being and fostering a sense of belonging.  

HR, while concerned with employee welfare, often has a broader focus that includes legal compliance, organizational policies and management’s interests. 

Note: The terminology and specific roles may vary across businesses. Some companies may use the terms PeopleOps and HR interchangeably, or they may have bespoke job titles, descriptions and responsibilities based on their culture and unique needs.

Which approach is better for your business?

Determining whether PeopleOps or HR is better is subjective and depends on a number of considerations, including your overall business goals, culture and the specific needs of the workforce. Both functions have their strengths and contributions to an organization’s success. Check out these considerations: 

Focus and approach.

PeopleOps typically takes a more strategic and employee-centric approach, emphasizing employee experience, engagement and culture. If creating a positive work environment, fostering employee development and aligning people strategies with business objectives are crucial to your company, PeopleOps may be a better fit for you. 

Compliance and administrative functions.

HR traditionally focuses on compliance with labor laws, policies and administrative tasks such as payroll, benefits administration and employee relations. If managing administrative processes efficiently, ensuring legal compliance and handling employee relations issues are critical for your firm, HR may be the more suitable choice. 

Organizational size and structure.

Established companies with more complex HR needs may benefit more from having dedicated HR departments that handle the various administrative tasks and compliance issues. Meanwhile, startups or small businesses may choose PeopleOps to build a strong culture, engage employees and manage talent effectively. 

Want to switch to PeopleOps? Consider outsourcing

Do you think your small business will benefit from having dedicated PeopleOps personnel, but you are not sure about committing to a full-time PeopleOps team? Consider bringing in outside help. An outsourced PeopleOps partner can offer a convenient, cost-effective way for your small business to reap the benefits of a more strategic approach to building an employee-centric workplace, improving employee experience, and ultimately, improving your bottom line.  

Want more? In addition to HR, benefits, recruiting and payroll through its PeopleOps, Escalon’s Essential Business Services include FinOps (CFO services, taxes, bookkeeping and accounting) and Risk (business insurance). Talk to an expert today.