In many regions around the world, the Human Resources department is not valued, not deemed as being important for an organization. Thus, many organizations don’t have HR departments, and top management makes the decisions usually associated with the HR department.
In these regions, HR is perceived as a burden because it does not bring in direct business. It is a source of cost, and not profit. But what many business leaders don’t realize is that HR actually does contribute to profit. How? HR generates profit by eliminating potential losses.
- Sure, a company loses money by hiring and firing employees, but that’s better than the thousands of dollars that would be lost when a project goes wrong because the employee isn’t working effectively.
- HR ensures that all employees are satisfied, especially top performers. It’s important for the entire organization to remain motivated. Keeping employees motivated and satisfied makes them more productive, leading to more profits.
- HR develops methods of reducing the workforce cost by negotiating better rates for benefits. It also makes sure a realistic wage is being offered after conducting salary analysis. Indirect profit!
Consider this: How do you attract employees to work for you? How do you make your company the employer of choice? HR helps you do that. HR recruits the best applicants and retains the most talented employees. It makes sure the employees are treated well, and all policies are being followed. It maintains the organization’s culture. All this helps create a strong corporate image and reflects the company’s status as an employer of choice.
How do you know your employees are performing well? HR, of course. HR develops a performance management system that measures performance and aligns employees with tasks that are suitable for their skills and expertise so they can play on their strengths and produce the desired results.
Do you know who is ready to take over in your organization? Probably not. Because HR handles that. HR identifies employees with the capability to eventually transition into a leadership role. This guarantees an organization’s stability and future success.
A Key Role
So is it correct to label HR as a burden just because it doesn’t bring in direct profits and is a support function? Is it OK to ignore ways in which HR helps an organization succeed or how it helps save money? I don’t think so. HR helps an organization in many ways we can’t even imagine. HR plays a major role in developing a company’s strategy, as well as handling employee-related activities.
It is important for organizations to start recognizing the importance of the HR department. Why not hire experts for the job and relieve top management of the extra burden?
Faizmeen Shehzad is the Marketing manager at Learning Minds Group. She often volunteers to teach and currently is pursuing her Master’s degree in Business Administration. Shehzad can be reached at Faizmeen.n@learningmindsgroup.com
