Often overlooked. Frequently underutilised. Yet absolutely essential to business success. Human Resources are, in fact, the key to business success.
Organisations that consider HR to be their most important resource will usually have the best talent and a strong company culture. As a result, they’ll have better retention and productivity. But why?
In this article, we’ll take a look at just how crucial HR really is.
Why is human resource considered the most important resource?
A company’s biggest asset is its people. You might disagree. For example, you could say:
“Our product/service is our biggest selling point”
That may be true, but who delivers, designs, and creates that selling point? Who guarantees its success? Your people.
Or, you could say:
“Our company has an incomparable reputation”
Perhaps that is true also. But, what is it that gives you that reputation? In most cases, the organisations with the best reputation are the ones that treat their people well.
Perhaps you believe:
“Financial success is always number one priority”
It makes sense. After all, without financial stability, there is no company. But, there is a positive correlation between how you manage your people and your profitability. Having the best people, and keeping them happy is fundamental to maintaining a successful business.
So, your people are your biggest asset—how does this relate to HR?
A good human resource function looks after your people. In doing so it will improve your product/service, your reputation, and your success. One way it does this is through recruitment.
For your business to succeed, you need the best talent. It’s easy enough to hire someone for a new role, but getting the exact right fit is more challenging. Many businesses lose money due to ineffective recruitment. Finding a right fit for the businesses isn’t just about qualifications either. A truly good fit for a role is someone who will stick it out for the long haul. HR can help you find candidates that will be satisfied with their job and want to continue their journey with you.
How does HR improve business performance?
What about business performance? Does HR help there too?
Yes. Organisational success comes down to individual performance. HR conduct appraisals and reviews with staff to address concerns and measure productivity.
Remember, happy staff are effective staff. Employment engagement is a huge issue at the moment, and it will be up to HR to come up with engagement strategies. Plus, they’ll develop and maintain positive working relationships with and amongst your workforce. HR is responsible for these relationships up until the final day of employment. This is known as the employment lifecycle, and it includes:
- Learning & development
- Performance management
- Dismissal, redundancy & retirement
There is the added benefit, of course, that you won’t need to handle all of the above by yourself. Having an HR department means your involvement in these processes is reduced. This frees up your time to build and grow your business. That’s just one more way HR improves business performance.
What value does HR bring to a company?
It goes without saying that if productivity is up, then your profitability is likely to increase too. However, many employers are hesitant to hire HR, or grow their current team, as they don’t directly bring in money.
While HR won’t be on the phones trying to make sales, or out delivering your service, they do bring value. The trick is to find the correct balance.
You can determine this by the size of your business. Your HR function should expand with the rest of the organisation. The more people you have, the bigger your HR department should be. If you are an SME with only one HR representative, chances are you need to invest more in human resources. Inversely, if you’re a start-up, and you have multiple people in your HR department, you might be losing more than you gain.
A good way to benchmark the value HR brings to your company is through staff feedback. Key metrics are staff engagement and happiness. A monthly or quarterly staff satisfaction survey will highlight problem areas and tell you how HR is performing.
Achieve business success through HR
HR is crucial to a happy workforce, and achieving your business goals.
But, it can be hard to balance the size of your HR function with the size of your business. Plus, it’s hard to benchmark success.
There is a way to ensure you find the right balance. That’s by utilising Croner’s HR services. With a subscription tailored to your business, you’ll access an entire team of HR professionals and employment law experts who are just a phone call away. Find out more about the service today by calling 01455 858 132.
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