Why Is Human Resources Important? - Definition, Benefit, Format & Samples

The Human Resources function is the backbone of organizational success within the intricate tapestry of modern businesses. The employees are crucial pillars of any successful organization, significantly influencing its trajectory and culture. This critical process of bringing in new talent marks a defining moment that shapes the company's direction and ethos.

The role of HR has transcended traditional administrative functions to serve as a driver of transformation and advancement across industries. Our endeavor is to furnish the requisite resources for adept navigation of the perpetually evolving sphere of people management.

Definition of Human Resources (HR)?

Human Resources is primarily defined as strategically managing an organization's workforce. Within any organization, HR holds a crucial role in securing, developing, promoting, and providing support to the right talent necessary to accomplish organizational goals.

HR professionals take charge of effectively recruiting, training, managing, and supporting an organization's human capital. Proper management of human resources departments not only boosts employee satisfaction but also propels a company's business objectives forward.

Additionally, in most companies, HR is also responsible for fostering the professional development, safety, and morale of each staff member during their employment tenure.

What role does Human Resources play?

Actively overseeing the entire employee lifecycle.

This holistic approach involves devising strategies for payroll, administering benefits, fostering a positive workplace culture, boosting employee productivity, managing relationships between employer and employee, and handling terminations.

Employee related Tasks

Apart from recruiting, hiring, and appointing workers, the Human Resources department performs other administrative duties including creating work-related regulations and policies, setting pay rates, and making sure that all workers are paid on time.

Promoting Organizational objectives

Human resources plays a critical role in every firm when it comes to finding, developing, elevating, and assisting the best individuals to advance organizational goals. Human resources also play a crucial role in coordinating the corporation's business goals with the requirements and goals of its workforce.

They leverage employee capabilities to drive organizational success by identifying skills gaps, designing L&D programs, and implementing performance management systems.

Through workforce planning, talent management, succession planning, and applying other HR best practices, HR professionals ensure the organization possesses the necessary talent to sustain operations and achieve long-term goals.

Ensuring Legal Compliance

Human Resources also implements essential company policies and regulations, such as ensuring compliance with the Equal Employment Opportunity (EEO) and GDPR. They need to stay up-to-date with changes in legal legislation and research new HR trends that will keep the organization running smoothly.

Goals of Human Resources

HR plays a critical role in securing, nurturing, promoting, and supporting the right talent that can help in achieving the organizational objectives.

Through workforce planning, talent management, succession planning, and applying other HR best practices, HR professionals ensure the organization possesses the required talent to sustain operations and achieve long-term goals. Some of the other goals under the purview of the human resources department include:

Containing costs:

HR ensures that they can find the right candidate within the budget allotted by management.

Keeping turnover low:

Lowering employee turnover is a critical task that falls in the purview of the HR department, considering that employee turnover is costly and replacing a former worker incurs a cost one-and-a-half times their annual salary. This expense can escalate rapidly when turnover rates are high, thus adding significantly to company expenses.

Fostering a great place to work:

Most organizations want top talent and have people eager to work there. Since the advent of social media and the ease of spreading reviews within mere moments, it becomes imperative for HR to do everything viable to create a healthy workplace environment to maintain the company's brand image in the industry, maintain a good reputation and minimize negative reviews to maintain a positive employee Net Promoter Score (NPS).

Avoiding legal implications:

Therefore, senior executives often look to HR to foster a culture where formal complaints are rare. When a problem arises, HR makes haste to defuse harassment claims, discrimination charges and other issues before they wind up in court. If the company has organized labour contracts, another goal of the HR department is to prevent union grievances and mitigate employee dissatisfaction.

What Is Human Resource Management?

Human Resources Management (HRM) is a strategic approach to managing the company's workforce in order to meet organizational goals. It encompasses overseeing all aspects of HR, including hiring, training, compensation, engagement, promotion, and employee retention.

Human resource management system encompasses the development and administration of programs with the aim of enhancing an organization's or business's effectiveness. It entails the comprehensive spectrum of creating, managing, and nurturing the employer-employee relationship. Employing an active approach, human resource management involves the crafting and implementation of programs to enhance organizational effectiveness, spanning the entire spectrum of the employer-employee relationship.

Objectives of Human Resource Management

There are four key categories in which we can distinctly place the HRM roles:

Social Objectives

The ethical and social responsibilities of companies evolve in response to the changing social environment. Each company must implement measures that cater to both the social needs of employees and the organization. These obligations also encompass legal requirements, like providing equal opportunities and equal pay for the same work.

Organization's Objectives

HR actively performs various tasks aimed at enhancing organizational efficiency. These include hiring, training, offering refresher courses, and ensuring employee retention.

Business Objectives

This category involves allocating the right human resources, tools, technologies, space, materials, and financial budgets to different verticals. The aim is to ensure the business operates at its full potential.

Personal Objectives

Within any organization, employees pursue their individual goals. HRM achieves its personnel objectives by providing the right opportunities, supporting career development and skill enhancement, and ensuring employee satisfaction through various employee-centric programs.

Human Resources Best Practices

These practices constitute strategic operations, serving as the cornerstone of employee management while aligning seamlessly with the organization's business plan. HR activities implement strategies regulated by these practices, ensuring their effective application daily.

However, enduring core human resource best practices have remained amid this transformation, serving as guiding principles for HR professionals. Companies that adopt these practices witness enhanced morale, increased productivity, and excellent employee retention.

Some of the best HR practices that can keep employees motivated and productive are listed as follows:

Providing security to employees

Ensuring job security for employees stands as the foremost best practice in Human Resources. Work, being a stable factor amid life's unpredictability, holds significant importance for most individuals. It's the primary reason why people choose to work - having an employer that enables them to support themselves and their families.

The concept of employment security enables employees to provide for their families after work, a foundational aspect that influences much of HR's initiatives. Additionally, it aids organizations in retaining their talent pool. Without actively working on retention, organizations risk losing their employees to competitors.

Selective hiring: Hiring the right people

The second best practice in HR involves selective hiring, allowing organizations to onboard employees who make substantial contributions. Hiring just anyone isn't the goal; the focus is on individuals who perfectly fit the job description. Companies strive to recruit outstanding individuals as they bring immense value to the business. Moreover, establishing a structured and equitable selection process is crucial. This approach significantly benefits in comprehending broader consumer behaviour and the diverse needs of customers.

Self-managed and effective teams

The diversity of perspectives yields a wealth of ideas, which, upon amalgamation and thorough scrutiny, result in the selection of the most exemplary ones. The most effective teams exhibit cognitive diversity and foster psychological safety among members. This environment allows for the free flow of diverse ideas and comfortable discussions. HR holds the responsibility of establishing and nurturing such high-performance teams.

Fair and performance-based compensation

The fourth best practice in Human Resources revolves around contingent compensation, specifically in the realm of compensation and benefits. When you bring in the right individuals, the aim is to offer them compensation above the average. These exceptional contributors bring immense value to your company, and it's crucial to retain and fairly remunerate them.

Offering compensation above the standard level does come with potential drawbacks. It might dissuade underperforming employees from leaving. Nonetheless, if your consistent hires are top-notch performers, providing above-average compensation becomes imperative.

Training in relevant skills

According to this HR best practice, companies should heavily invest in employee training, both in time and budget. Once you've recruited top talent, it's crucial to ensure they stay ahead in their field. This holds even more significance today due to the exponential growth of technology. This is where learning and development play a pivotal role.

Conclusion

In the intricate fabric of contemporary enterprises, human resources emerges as the indispensable element that unites individual aspirations with organizational strategic objectives. As we navigate the continuously evolving work paradigms, one aspect remains unequivocal: human resources is pivotal in nurturing an environment where talent thrives, innovation prospers, and inclusivity prevails. Through the embrace of adaptability, empathy, and progressive methodologies, HR professionals possess the authority to not only shape the trajectory of businesses but also the very essence of the future of work.