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The ultimate guide to HR terms and definitions you should know

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Stay up to date with these essential HR terms and definitions

Are you starting an HR internship position?

Or perhaps you’ve just joined a new HR department in a different organization? Maybe you’re looking to brush up on your expertise in the field of HR?

Since HR positions require an in-depth understanding of various specific topics, you’ll need to understand a broad range of HR terms to be successful in these roles.

If you’re not confident in your knowledge, you need this ultimate guide to HR terms and definitions! Make your role easier by taking a look through this HR glossary.

Skip to a section by clicking a letter below:

A

Absenteeism

Absenteeism is the failure of an employee to attend work when they are expected to be working. Employees who frequently do not attend work when scheduled can be dismissed for frequent absenteeism.

In certain situations, if an employee is absent due to medical reasons, termination can be classed as an FMLA (Family Medical Leave Act) violation or a violation of the disabilities act.

Affirmative action

Affirmative action is the explicit and proactive actions HR professionals take to enhance employment opportunities for particular groups, including:

Female applicants
Applicants of an ethnic minority group
Applicants who have a disability

Despite being used to counteract historical hiring decisions that were discriminatory, affirmative action has been regarded as a controversial policy.

However, the Rehabilitation Act of 1973 reinforces affirmative action policies, as it requires employers to take affirmative action to recruit, hire, promote, and retain candidates who have disabilities.

Affirmative action plan (AAP)

A procedure that is specified as part of a plan to improve the employment opportunities of particular minority groups or underrepresented groups in society. The plan itself is a document that details all the steps your organization has taken and will take to put in place equal employment opportunities.

According to Section 503 of the Rehabilitation Act of 1973, an affirmative action plan is obligatory for organizations with 50 or more employees and a contract of $50,000 or more.

AI bots

AI bots (also known as chatbots) are a type of software application programmed with natural language processing and machine learning. They can enable you to automate and simulate applicant screenings.

Artificial intelligence bots can also use data provided by an organization to provide answers to an applicant’s questions, such as questions about the company’s perks.

Applicant tracking system

An applicant tracking system (ATS) is a type of electronic software application that makes managing your organization’s recruitment and employment requirements easier and more efficient.

Three areas in which ATSs can assist recruiters in their role include:

Managing training opportunities
Onboarding candidates
Succession planning management

Both small and medium-sized enterprises and larger enterprises can benefit from an applicant tracking system, which can also reduce the time to hire.

Recommended reading: How to choose the right ATS for your organization

B

Background checks/screening

Background screening is a type of testing approach that involves validating applicants’ qualifications, knowledge of your industry, or cultural alignment with your organization.

A few other tests that you might carry out as part of your hiring process include:

Drug tests/substance abuse screening
Criminal background screenings
Personality tests
Skills tests

Behavioral interview

Behavioral interviews focus on the behavior and previous performance of candidates, enabling you to determine a candidate’s alignment with the organization’s open role.

During a behavioral interview, you ask applicants open-ended questions and follow up their responses with further questions to get a better understanding of a candidate’s behavior in certain work-related situations.

This interviewing technique provides a more objective set of facts and is becoming increasingly popular.

Blind screening

Blind screening refers to a candidate screening approach in which personal details are omitted or obscured to prevent unconscious biases from affecting a hiring decision.

For example, this technique might involve using blind resume screening tools that blur the name, address, date of birth, or candidate photo featured on a resume.

Blind screening can be useful for building a diverse team and hiring qualified applicants.

Benefits

Employee benefits are a type of compensation that employers offer employees in addition to their monthly or hourly salary.

For certain roles, employee benefits may be required by labor law if there is a high risk linked with the position. But in many cases, employers offer employees a wide range of benefits voluntarily to enhance employee engagement and show that they value their employees.

Some examples of benefits that can enhance the employee experience are:

Gym membership perks
Healthy food options in the canteen

C

Candidate sourcing

Strategies you can use to find active and/or passive candidates whose skills align with the requirements of a vacant role in your organization.

Candidate sourcing takes place in the first stage of the recruitment process, alongside writing and posting a job description. It’s a proactive part of recruitment that might involve using traditional job boards or some form of creative candidate sourcing.

Recommended reading: The ultimate guide to candidate sourcing for recruiters

Career pathing

Career pathing involves outlining the goals and career trajectories that employees can achieve. Employers, HR professionals, and employees work together to plot out a course for career development within an organization.

It is important that you ensure employees recognize which skills they require to advance.

Compensatory time off

If an employee works overtime, some organizations offer them compensatory time off, which is paid time off to compensate for the extra hours worked.

It is used to balance out hours the employee worked. For instance, if an employee works 45 hours in a week when they normally work 40 hours, the employer will offer them five hours of paid time off.

Cultural alignment

A concept that describes when members of your organization hold values that are aligned with your organization’s culture. Cultural alignment can contribute to employee satisfaction at work and promote employee retention. You can assess it with a cultural alignment/culture add skills test.

Custom questions

Custom questions are part of a skills assessment. You can use them to ask applicants for additional details as part of their application.

Some examples of custom questions include:

Custom multiple-choice questions
Coding questions
Essay questions
Video questions
File upload questions

Constructive dismissal

Constructive dismissal occurs when an employee resigns from their position due to negative working conditions in the workplace caused by severe incidents instigated and carried out by an employer.

Since these severe incidents are classed as a breach of the employee-employer contract, the employee can go through the courts to receive compensation for this.

Confidentiality agreement

A legal agreement preventing an employee from revealing information about the organization they work for. The agreement can be permanent, so even if an employment contract ends, the employee is still bound by the terms of the agreement.

Confidentiality agreements are used in various situations, such as circumstances involving stock or company purchase or contractor contracts.

The advantage of a confidentiality agreement from the employer’s perspective is that information about the organization is kept confidential and hidden from competitors.

Compensation

Compensation can include direct compensation, which is the salaries employees receive from employers for the work they do. However, there are many different types of compensation, including:

Commissions
Compensatory time off
Bonuses
Employee benefits
Stock options

Cost per hire

Use this metric to assess and measure the recruiting expenses used to attract candidates to an open position, screen them, and hire them. Other costs that contribute to cost per hire include admin, travel, and equipment costs.

The formula to calculate cost per hire is the total recruitment cost divided by the number of hires you make.

Calculating the cost per hire requires you to calculate both internal and external recruiting costs. Internal recruiting costs include:

Interview costs
Referral bonuses given to employees

External recruiting costs include:

The costs of advertising a job description
The costs of organizing recruitment events

Recommended reading: What’s the real cost of a bad hire for your business?

Creative sourcing

A creative strategy or combination of creative strategies used to approach, engage, and source candidates for a job opening. Some creative sourcing approaches include:

Creating a company blog and attracting candidates with SEO
Attending a career conference
Setting up an employee referral program
Using employee testimonials to demonstrate your organization’s culture
Using niche job boards
Sourcing through specific channels, like Facebook or even Instagram
Asking customers or clients for referrals

D

Discrimination

The unfavorable treatment of an employee due to unconscious bias or prejudice against their race, ethnicity, gender, disability, age, mental health disabilities, religion, or sexual orientation.

Workplace discrimination can result in fines and prosecution (which can be up to $300,000 for companies with 500 employees or more), reduced employee morale and productivity, and damage to the organization’s reputation.

Diversity hiring

A recruitment strategy you can use to increase diversity within your organization. Diverse teams have a broad range of cognitive abilities, expertise, personalities, and behaviors.

Recommended reading: How to hire diverse candidates

Diversity training

A type of training you can use to enhance your organization’s awareness of cultural differences, cognitive differences, and differences in skills within the work environment.

Diversity training can help teams promote inclusion and team cohesion, increase positive interactions between team members, help prevent unconscious bias, discrimination, or prejudice, and enlighten teams about what makes team members unique.

E

Employer branding

Marketing and strategic efforts related to an organization’s brand and reputation. This approach might include developing a company career page or creating a company blog to enhance how prospective or current employees view the organization.

Employer branding can also be important for organizations that are trying to attract funding or venture capital.

Employee attrition

The reduction of the size of a workforce due to the resignation or retirement of employees. Attrition occurs when an organization doesn’t replace these employees.

Attrition can be deliberate; in this case, it can be described as “downsizing” or a “hiring freeze.”

Employee attrition is different from turnover. Although the size of a workforce can be reduced due to both employee attrition and turnover, with turnover, HR professionals seek to replace the individuals who have left the company.

Employee empowerment

The process of empowering employees and making it easier for them to work with management to make essential business decisions.

Employee empowerment involves providing employees with tools, resources, training, and skills that help them to contribute to the organization’s success. With success comes reward.

Employee onboarding

Employee onboarding includes the many steps taken to orientate new employees and help them complete the transition from being a candidate to an employee.

Some of the onboarding steps required to successfully orientate a new employee and help them adjust to the company are:

Benefits and salary administration
Setting up tools and equipment
Providing a new employee checklist

Employee orientation

Employee orientation is the process of helping new hires acclimate to your organization’s culture and gain a better understanding of all its departments and how each department is connected.

It involves teaching employees about the company’s policies and giving them training opportunities to help them get used to their role within the organization.

Employee retention

The processes through which you ensure your employees stay with your organization, such as incentives and policies that create a favorable environment to work in.

When done correctly, employee retention can reduce turnover rates in your organization.

Employee turnover

Employee turnover refers to how many employees leave your organization over a certain timeframe (typically one year). Employee turnover is different from attrition, as with employee turnover, the employees who leave are normally replaced. It is often measured as a percentage.

Measuring turnover is important for understanding the key reasons behind employee turnover.

The two main types of employee turnover include involuntary and voluntary turnover. While involuntary turnover refers to the termination of an employee’s role due to inadequate performance or other factors, voluntary turnover occurs when an employee chooses to leave your organization.

Employee wellness program

A program set up by an HR professional or employer to help maintain or enhance the health of an organization’s employees. Some of the many types of employee wellness programs include:

Offering gym memberships to employees
Programs to help employees stop smoking
Setting up gym classes, such as classes for yoga or meditation
Offering healthy snack options in a canteen

Equal employment opportunity

Equal employment opportunity is the concept that an employer should treat all candidates fairly during the recruitment process and after they have been hired. To offer candidates and employees equal employment opportunities, every applicant who is a good fit for the role should be given equal opportunities for success.

In the US, equal employment opportunity is supported by the Equal Employment Opportunity Commission, which is a body that enforces laws and regulations related to discrimination in the workplace. Similar laws protect equal employment opportunity in other countries as well.

Exit interview

An exit interview involves speaking with an employee who has chosen to leave your organization. When you conduct an exit interview, your goal is to analyze the employee’s experience and find ways to enhance employee retention.

Exit interviews are a good way to increase your other current employees’ level of employee engagement going forward.

Expatriate employee

An expatriate employee is a professional worker who chooses to take up a role in a country outside of their country of national origin or home country. Expatriate employment can either be chosen by the employee or set up by the employer as an assignment.

The main types of expatriate employees include:

Foreign correspondents
Temporary transferees
Secondees

H

Hard skills

Technical expertise and understanding of a specific topic, such as software engineering, programming, coding skills, or knowledge of frameworks. These skills are required for candidates to be successful in specific fields. Other hard skills include:

Data science knowledge
Search engine optimization expertise
UX design

Applicants, candidates, and employees will have gained hard skills through training, work experience, or courses.

Health savings account

A health savings account is an account that employees make regular contributions to and use to build up savings to cover health care costs. Medical costs might include visits to a doctor, dental care, and/or eye care.

Health savings accounts are usually accompanied by an HDHP (high-deductible health plan). Either an employee or an employer or both can make contributions to a health savings account. The contributions can be built up and gain tax-free interest.

Holistic HR

Holistic HR is an approach you can use to support employees’ work ambitions as well as their important personal goals. It involves learning about your employees’ lives beyond their work environment and helping them to achieve workplace goals while ensuring their work life doesn’t conflict with their personal goals.

Benefits of holistic HR include reduced sick leave, a more productive workforce, a healthier workplace, and enhanced company culture.

HRIS (human resource information system)

A system that is used to handle several separate HR processes more simply and efficiently. Some of the processes that HRIS systems simplify include:

Managing payroll
Managing employees
Applicant and candidate tracking
Employee onboarding
Employee benefits
Time tracking and monitoring
Monitoring vacation/leave

HR outsourcing

A strategy in which organizations request the services of an external party to handle the HR aspects of the business. External HR parties can manage a range of services on your behalf, some of which include:

Administration and payroll
Performance management of your employees
Talent management of candidates
Sourcing and recruitment
Employee benefits administration
Assessing the company’s compliance with labor laws
Tasks related to human resource management

HR outsourcing or outsourcing to professional employer organizations (PEOs) can help your organization save on expensive costs while boosting its efficiency and helping you to source and retain exceptional talent.

HR metrics

Methods of measurement your HR team can use to quantify costs and calculate where expenses are being spent, how employees are performing, how they have progressed, or how long it takes to hire a candidate. Some of the specific HR metrics you might be familiar with include:

Time to hire
Cost per hire
The quality of certain channels used to source candidates
Source to close metrics
How engaged candidates are or the candidate experience

J

Job profile

A job profile is part of a job description. It accurately outlines the specific tasks that a job requires and features the skills you’re looking for from applicants to successfully carry out the position.

A job profile includes details of the department and colleagues that your candidate will report to. It might also mention the performance standards used by senior management to evaluate the successful candidate’s work.

Candidates use a job profile to align their skills with the role and evaluate whether they would be a good fit for the position.

Job analysis

The systematic and thorough process of collecting job-specific data and information that relates to the requirements of an open position. A job analysis will give you data on a few key areas related to the job, including:

Job title
A summary of the position
Responsibilities and duties of the role
Knowledge required for the position
Qualifications that make it easier to perform the role
Skills required for the position

Job analyses help HR personnel discover the right candidates for open positions and find out whether candidates are aligned with the particular expectations for the role.

Job restructuring

Job restructuring is the process of altering the role requirements and responsibilities of an employee’s position. This typically means employees gain other responsibilities due to the reorganization of a business or alterations to a department.

Job restructuring can either be classed as horizontal or vertical restructuring. In horizontal restructuring, employees take on new responsibilities from other roles that are at the same level as their current position. In vertical restructuring, employees take on higher-level tasks compared with those they perform in their current position.

Job description

A job description is a document created by HR professionals and posted on a job board that summarizes a job role in terms of the responsibilities and duties of the position as well as the qualifications and skills needed to be successful in the role. In many cases, job descriptions are the first way your applicants will get to know your company.

Other main features of a job description include:

Details about the company culture
Perks and benefits that the company offers its employees
Mission statements and values that the company believes in
Wages being offered for the vacancy

L

LMS (learning management system)

An LMS, in the context of the workplace, is a type of software that organizations use when developing training and courses to educate employees so that they can progress in their careers.

Also referred to as a corporate learning management system, the software functions online, and employers can choose a training path for employees to follow.

Learning management systems can also be used as part of onboarding. The software makes it simpler to monitor your employees’ progress and use reports to gauge which other training programs might be required.

N

Non-compete agreement

A legal agreement that states that ex-employees cannot compete with your organization when their employment period has ended. It also prohibits former employees from sharing details about your organization with other businesses regardless of whether they decide to leave the company or have their contract terminated.

In some situations, a non-compete agreement might become an obstacle for ex-employees who are searching for new positions in their industry. For instance, a non-compete agreement might make it impossible for an employee to set up a business in the same field as their previous organization.

These agreements are typically signed when the employment period starts.

O

One-way video interview

One-way video interviews are also referred to as asynchronous interviews because only the candidate is present in the interview. The candidate is expected to answer set questions, but the interviewer is not part of the interview.

Your candidates will send you their responses in a short recording of themselves, which will help you screen and assess their alignment with the position you are hiring for.

Organizational development

Strategies based on scientific concepts that make it simpler for organizations to enhance their efficiency and effectiveness to achieve certain goals. These strategies normally include aligning the organization’s employees, the structure of the organization, and the rewards given to employees to enhance the organization’s capability.

For instance, a corporate organization might use organizational development to increase its ability to make profits. A non-profit might use organizational development to enhance its cultural values.

P

Performance evaluation

A formal process that involves assessing an employee’s performance in terms of their work inputs over a certain period of time. Performance evaluations are carried out to analyze how much value an employee adds to an organization revenue-wise.

Part of a performance evaluation involves offering frequent feedback to employees to inform them of the areas they need to develop or improve in.

An employee can also contribute to a performance evaluation by sharing their thoughts on their progress, what they consider to be an appropriate performance level, and what they can do to improve.

You can ask employees a variety of questions in their performance evaluation, such as:

Which tasks are your least favorite?
Which tasks are you comfortable doing?
Which areas do you think you could improve in?
How can we support your career journey?

Personality test

A personality test is a type of assessment that you can use to categorize an employee’s personality. These tests are useful for learning more about how your candidates and employees will work with other employees and how they approach difficult problems.

There are several different types of personality tests, including:

Each personality test measures different personality types, and they work in different ways. For example, the Big 5 OCEAN personality test measures five aspects of personality (openness, conscientiousness, extroversion, agreeableness, and neuroticism) to determine which personality type best matches your candidate’s personality.

You can also use the Enneagram personality test to determine which personality type most closely matches your candidate’s or employee’s personality (out of nine different types, such as “The Performer” or “The Loyal Skeptic”).

R

Rate of abandonment

A metric that helps you keep track of how many applicants begin an application but drop out of the application process or decide against submitting their application.

A high rate of abandonment might suggest that your application process is failing to engage candidates sufficiently or that there is a way to improve your application process, which is why tracking abandonment rates is important.

Reasons for a high rate of abandonment include:

Lengthy application processes
Candidates might have accepted another position
Candidates might have had second thoughts about your organization
Your organization might have failed to follow up with a candidate
The candidate experience might have been poor

Retention strategy

An approach used to reduce turnover rates and keep top talent employed at a company for a long period. Retention strategies can also help your organization to reduce employee turnover, avoid attrition, and increase the engagement of your employees.

Some retention strategies might include:

Helping your employees to meet their goals
Developing a top onboarding approach
Creating an encouraging company culture
Offering incentives and perks
Providing encouraging feedback for successful projects
Asking for feedback from your employees
Emphasizing the importance of a work-life balance
Setting up team-building exercises

Reverse mentoring

A training and mentoring approach that inverts the standard hierarchy of mentorship. In reverse mentoring, younger employees in an organization mentor employees who are older than them.

One example of reverse mentoring could be when young employees teach older employees how to use certain software applications or social media channels, such as LinkedIn.

S

Skills testing

Skills testing is a process in which employers request applicants to complete a skills test as part of an assessment or screening process. The skills testing process helps HR professionals, recruiters, and hiring managers make decisions about the competencies of applicants.

Skills testing helps employers avoid unconscious bias when hiring candidates, makes it simpler to compare between top candidates, and reduces the time it takes to hire a candidate.

You might also choose to use skills testing with your organization’s current employees, which can contribute to the development of training programs.

There are many different types of skills tests, including:

Skills assessment

A skills assessment is a selection of skills tests used to comprehensively assess candidates or employees across a range of skills. Skills assessments are ideal for filtering out unqualified candidates from your application process.

As part of a pre-employment skills assessment, you might choose the following tests to assess your candidates or employees:

Cognitive skills tests
Hard skills tests
Soft skills tests
Culture add tests

Soft skills

Soft skills are not specific to one job or technical role. Rather, they are more general characteristics and non-technical skills that make it easier to carry out a job role successfully. Soft skills are also referred to as “interpersonal or people” skills and include:

Communication skills
Time management skills
Ability to work effectively in a team
Problem-solving skills

Structured interview

A structured interview is an interview process that consists of open-ended and closed-ended questions that are planned before the interview. It is an interview process that can help you gather quantitative responses from candidates.

You might carry out structured interviews in person or via a video interview process. They are also referred to as formal job interviews.

Succession planning

Succession planning involves training and preparing staff members to step into leadership or senior management roles. The purpose of succession planning is to fill positions with the right talent in the event the holder of the role resigns or is fired.

Succession planning is not achieved in a matter of hours but is rather an ongoing process that needs regular alterations.

T

Time to hire

An HR metric that helps you measure how much time has passed from the moment you contact a candidate to the moment the candidate chooses to accept the role/offer of employment.

You may need to improve your recruitment process if there is a long period between the moment of contact and the moment a candidate accepts the offer of employment. Therefore, time to hire is useful for learning if you need to make your hiring process more efficient.

Time to fill

A metric that shows how long a vacancy in your organization remains open and unfilled. It measures the length of time that has passed between the posting of the job requisition and the acceptance of the job offer.

Termination of employment

When an employment contract and an employee’s work with an organization ends either because the employee chooses to leave or because the employer ends their contract. If the employee’s contract is ended by the employer, this might be due to:

The downsizing of the company
Employee absenteeism
Poor employee performance

U

Unconscious hiring bias

Unconscious bias occurs when you make a skewed judgment about an applicant with limited information and base your opinion on a “gut feeling.”

For example, you might not choose to advance a candidate to the next round of interviews because of their age, gender, race, religion, or physical attractiveness.

Although all humans have it, unconscious bias can hinder the recruitment process and cause you to make incorrect hiring decisions.

Unstructured interview

An interview process in which no set questions are prepared beforehand. Candidates are invited to answer open-ended questions in a flexible, conversational way. Unstructured interviews are also referred to as “informal interviews.”

Just like structured interviews, unstructured interviews can be carried out in person or by using video technology.

V

Video interviewing

Video interviewing involves carrying out interviews virtually with candidates. HR professionals typically use video technology and platforms such as Zoom to do these types of interviews.

Video interviews simplify the screening process, especially if you are hiring remote employees. They can also reduce travel costs for candidates who would otherwise have to travel to your organization for an in-person interview.

Recommended reading: An easy-to-use guide to video interviewing for HR teams

W

Work-life balance

A concept that stresses the importance of balancing work duties and responsibilities with personal life/activities and leisure beyond the workplace to enhance employees’ productivity in the workplace and their quality of life.

A poor work-life balance can lead to stress, less productive employees, and more errors at work. It is vital for employers to promote a good work-life balance, as they are responsible for the health of their employees.

Stay up to date with these essential HR terms and definitions

Although being a newcomer to the HR field can be challenging, especially with the vast range of specialist terms to come to grips with, the key is to continue learning.

Use this human resource glossary to help you hire with confidence and keep up to date with new terms by making a note of the HR terms you’re unfamiliar with.

Whether you’re joining a technical HR team or a sales HR team, hire confidently and remain aware of developments in your specific field by learning these crucial HR terms.

With TestGorilla, you’ll find the recruitment process to be simpler, faster, and much more effective. Get started for free today and start making better hiring decisions, faster and bias-free.