Why HR is important

Why is Human Resources Important?

The role that human resource management plays in every organization may look slightly different, but human resources, or HR, is vital to business success. Strategic HR planning and initiatives help improve employee engagement, development, and make business goals more human-focused.

HR has always been important, but COVID has thrust it into the spotlight. With organizations navigating challenges in recruiting, retention, safety, compliance, hybrid work, and so much more, demand for HR has never been higher.

There are many misconceptions about the role of human resources in a company’s structure—from those that think HR is unnecessary for a small business to those that see the HR role as one that is highly limited and largely disciplinary.

The truth is that HR can function in many ways. Every company can leverage human resources to optimize their business strategy and to grow faster, if they know where to start.

What is Human Resources?

Human resources management, which is at times referred to as “Human Resources” or simply “HR,” is the department or individual that focuses its attention on a company’s most valuable asset: its people.

A robust HR function will oversee and execute these key responsibilities, to name a few:

  • compensation planning
  • new employee recruitment
  • career paths and succession planning
  • performance management
  • talent development
  • total rewards
  • employment law compliance
  • workplace culture
  • leadership development
  • employee engagement
  • employer branding
  • executive coaching

In addition, an HR department is typically responsible for developing policies that affect employees of an organization, including their relationship to the company. Historically, HR was thought of as the administrative record keeper, but in recent years has positioned itself as a key player in leading organizations to achieve its strategic goals through finding, developing, and retaining great people and employing great people practices.

Strategic Human Resource & Talent Management

While many companies have human resources departments, not all human resource professionals have the strategic knowledge necessary to take their contributions to the next level. While basic HR functions, such as resolving employee conflicts and administering benefits are largely reactive, strategic HR management means being proactive about the needs of a company. Rather than waiting until they are called upon, a strategic human resources expert anticipates stumbling blocks and helps the organization to prepare for them so that they can be overcome with as little friction as possible.

Filling Talent Gaps

Company growth spurts or sudden personnel gaps can happen unexpectedly. When you close one big sale or have a string of depatures, suddenly you feel like you need to bring on a whole new team.  However, one bad hire on a team can grind operations to a halt and cause issues that reverberate throughout your organization. Strategic human resource management can help you to assess your current team and find the gaps where new hires will help the most, then help you to find the right people to fill those gaps with competitive insights and creative recruiting solutions.

Competitive Compensation Packages

A strategic human resources professional is familiar with the compensation packages offered within your organization, but also has the network necessary to collect details about compensation at similar companies in your region or industry. Attracting top talent is one of the best ways to ensure sustainable growth, and a good human resources professional will be able to ensure your offers align with what is expected in your industry as well as recommend innovative compensation and benefits that can help to differentiate you from the competition.

Effective Employee Development & Retention

The role of the human resources department — whether internal or at a collaborating organization — does not end when a new employee accepts the new job. A strategic human resource plan must include direction for employee onboarding, training, and ongoing development. An ongoing investment in employee training not only leaves you with a more effective workforce, but means your employees are more engaged and more likely to stay with your company. With the cost of each new hire growing ever more expensive, employee retention is essential for companies looking to grow quickly.

Compliance Expertise

Nothing can derail a growing business faster than a lawsuit that could have been avoided. Human resources management experts know the laws that are pertinent to your industry and can ensure that your policies are in line with those laws. Should any issues arise with employees, the right human resources management resource can help you navigate the waters to reduce risk to the organization.

Employer Branding

You know that in today’s labor market, competition for top talent can be fierce. Taking a strategic human resources approach will help your organization to develop an employer culture and brand that is attractive to the kinds of dedicated employees that you want, which will streamline your hiring process and give you an edge over other competing companies.

How to Find the Right Human Resources Partner

Companies that are just beginning to experience major growth may not have the resources or the inclination to build out an internal human resources department. While it would be a mistake to overlook HR altogether, it is possible to leverage HR expertise without hiring internally. A strategic human resources partnership can be an excellent solution for small to medium-sized business that needs the support and expertise that a team of HR professionals can provide.

Experience is Critical 

It can be tempting to work with an HR professional that has little experience if your main concern is cost. However, an inexperienced partner can end up costing you a lot more when you must hire someone else to correct their mistakes. Look for a strategic human resources firm that has experience and references from other local companies, specifically accomplishing what you want to do — whether that’s improving your onboarding process, strategic talent acquisition, or employer branding.

Understanding Your Industry

Your human resources management partner does not necessarily have to work only within the specific niche of your industry to advise you on best practices. However, industry experience will be quite valuable in talent acquisition, since your partner will have the network and foundational knowledge to spearhead an effective talent search or lead an initiative. Your business will also have regulatory needs that differ from other industries, so that specialized knowledge is key in a strategic HR partner.

Leveraging HR for Your Business

As a business owner, you know that it’s time to start thinking more strategically about your human resources needs. Now that you know how human resources management can benefit your organization, it is time to start searching for the right partner to help you along the way.

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