Most business disciplines have a clear and easily understandable role in the business hierarchy. For instance, the marketing team is responsible for getting as much attention and eyeballs on a company’s product or services as possible. Similarly, the supply chain department is responsible for handling production and shipping logistics to ensure supply meets demand.
On the other hand, most people don’t understand the role the human resources department plays within an organization because human resource work isn’t as tangible. Most human resource efforts happen behind the scenes, meaning their work isn’t always as glamorized as the sales or marketing departments’ work.
However, if you look at any company, whether it’s a rising startup or a Fortune 500 company, odds are they’ve got an extremely competent HR team assisting their operations. A competent HR department can make or break your business. That’s why every business needs an HR department as soon as they get going.
This article will discuss how an HR department can benefit organizations.
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Why HR Departments are Crucial for Businesses
So, we’ve gone on about how HR departments are key to a company’s success, but we haven’t gone over why that’s so. If you’re considering learning more about human resources or want to pursue a career in the field, consider obtaining an MBA degree in human resources online.
Here are some reasons every business needs an HR department:
Employees are an organization’s backbone because businesses would stop functioning without them. There’s a reason organizations often consider employees their most valuable asset. Human capital is fundamental for sustained growth and business success.
Let’s assume you recently started a business. It’s a small startup. You and your co-founder are the only ones working on it. The two of you might bootstrap the company during the initial few months, performing every role by yourself as you try to establish it. However, you’ll eventually need to hire more people to get your business to where you want it. You might onboard the first few employees yourself. However, you’ll eventually need to create a human resources department that can identify suitable talent for your business and onboard them efficiently.
Skilled human resource professionals know how to quickly identify potential candidates who can add value to your company. In addition, they also know how to create effective job descriptions to ensure you get the best talent possible. Furthermore, an HR department is necessary in every organization because new talent requires help adapting to a new company. HR professionals try to ensure the adaptation process is as seamless as possible by giving new hires an orientation and assisting them in adjusting to the company’s culture. HR professionals also handle contracts, salary negotiations, etc.
2. Key Role in Organization Development
Every business also needs an HR department because they play a critical role in organization development. HR professionals know how to use their knowledge and skills to improve the organization’s workforce by creating a more conducive working environment optimized for success.
3. Employee Training and Development
Organizations around the world spend billions of dollars training and developing their employees because a more skilled workforce means greater productivity and efficiency. Every business, no matter how large or small, needs an HR department to determine employees’ current competency levels. Then, your HR department can devise a plan for training that your workforce needs to be able to do their jobs better.
Companies in their initial or growth stages can particularly benefit from helping employees level up their skills as it can lead to greater productivity, resulting in greater profit margins. Your HR department will identify learning and development opportunities and help your existing workforce perform its tasks better.
4. Managing Compensation and Benefits
Businesses are profit-making enterprises. As a result, they want to increase profits in whatever way they can. Similarly, employees don’t work for free. They want to be well-compensated for their services. Hence, employees regularly want their compensation and benefits to be adjusted if they’re providing value to a company.
Companies often have annual or bi-annual performance reviews and appraisals. These reviews and appraisals evaluate employees’ performance over a given period against their job responsibilities, determining how well they performed. As businesses want to retain their best talent, they’ll ensure these employees are well-compensated, and their appraisals reflect their hard work.
HR professionals determine the criteria for evaluating employee performance and manage compensation and benefits. They also assist managers with job appraisals based on performance.
5. Conflict Resolution
Conflicts often arise in the workplace. For instance, an employee might be unhappy with their supervisor’s management style. Problems could arise between the two, resulting in friction, which affects the working environment. HR professionals are skilled in handling workplace conflicts and relations. They’ll identify issues between supervisors and employees and devise methods to resolve friction. As a result, their efforts lead to positive working relationships that boost productivity and morale within the company.
6. Ensuring Employee Satisfaction
According to research, satisfied employees are ten to twenty percent more productive than their unsatisfied counterparts. Therefore, it’s unsurprising that businesses want to ensure their employees are as satisfied as possible.
Measuring and improving employee satisfaction is difficult. HR professionals often create employee surveys, oversee focus groups, and implement other measures to ensure employees are happy and engaged in the workplace,
Some businesses also often have high turnover rates. High turnover is directly related to satisfaction because unhappy employees are more likely to leave the company. They might leave because they’re dissatisfied with their pay, don’t enjoy their job, have issues with management, etc. Your HR department will determine the causes of high turnover rates and create ways to fix the problem.
HR departments provide great value to businesses. They play a crucial role in budget control, onboarding new employees, developing policies to form a strong company culture, ensuring employee satisfaction, and managing workplace relationships. Thus, creating an HR department should be a top priority for new businesses.