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Why is HR important?

The HR department in any company can be its ace in the hole, if used strategically. HR is a company’s human resource multiplier. The functions of an HR professional should focus on the company’s greatest resource of all - its employees. Without good employees, the best business plan and ideas will fail.

In your business there are experts to oversee and advise you on various areas and departments. For example, your CFO’s sole purpose is to keep their eye on the financial functions and decision for the company. Without good accounting and insight on your cash flow, investments, and balance sheet you risk making poor business decisions and potentially going out of business.

Likewise, there are many reasons why the role of HR in a company is important to its survival and success. The reasons why HR is important can vary depending on if you look at the issue from a manager or employee perspective. Below is a list of typical functions of a human resources department that will help you better understand the essential role of HR in a company.

1. Management development and training

One way to be a company resource multiplier is to help managers be better managers, which in turn will help prevent or eliminate distractions for your employees. Employees don’t leave bad companies, they leave bad bosses, according to Beverly Kaye, co-author of Love ‘Em or Lose ‘Em: Getting Good People to Stay. Good managers are crucial to an effective organisation but most have to learn how to be effective. The role of HR in a company is to help develop and coach managers to do the best job possible. HR professionals have a lot of experience working with employees in all sorts of situations. HR’s role is to advise and assist management on how to manage employees and deal with difficult situations. The reason why HR is important in helping managers is if they are able to manage effectively, problems that arise won’t escalate to the point of distraction for employees.

2. Keeping management focused on their job

HR is important for managers so that they can stay focused on their job. There is a lot of new regulation that came out this year that affects businesses. One role of HR in a company is to unravel the byzantine employment regulations using their expertise and to advise management about how they affect the business. They then updates business practices so the company is compliant. This is no easy feat.

3. Hire strategically, hire right

Another way HR is important for managers is that it can assist with strategic hires; by this I mean hiring right. I believe recruiting is the number one way for HR to make an impact on the organisation.

Hiring right means reduced turnover and increased retention. It means finding the high potential candidate who can do ten times as much as the average employee and then being able to convince them to work for you. It also means not hiring problem employees to start with. Most of us have heard of the Pareto Principle (The 80/20 Rule), which suggests that 20% of the employees take 80% of your time. Again, going back to the notion that HR is a human resource multiplier, by hiring right you can focus on growing the business not dealing with problem employees. To do this there should be a systematic interview process that probes for work ethic, attitude, aptitude and motivation, in addition to determining if they have the right skills for the job. HR can be an instrumental in the process.

Why is HR important for employees?

HR is an advocate for employees. The functions of an HR professional are to make sure that all employees are treated fairly and equitably and that the needs of the business are balanced against the needs of the employees.

For the same reasons listed above, employees also make gains. Employees benefit when managers are trained well and know how to be good managers. Employees need their managers focused on getting work done instead of trying to figure out what new laws just came out this year. Employees also benefit when the company hires right because that means they have less co-worker issues to deal with themselves. They don’t have to take on extra work when poor performers are let go. They don’t have to train the new person. They can stay focused on their job.

We have presented only the most essential reasons why HR is important. There are many more when you look at the day-to-day operations of a smooth-running, successful company. HR is more than someone who takes your new hire paperwork or files the benefit forms. The role of HR in a company affects all aspects of the organisation. Why? Because HR supports employees and employees are your most important resource.

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