Whilst handling many fundamental “administrative” tasks and the company’s employee-centred activities, the human resources department is also vital for developing and sustaining a company’s overall strategy. Despite this, not every company is fully understanding of the value of the human resource department.

The human resource department can be considered as the crux of the company, as their job can be essentially considered as getting the most out of their employees. A well functioning HR department will sustain a productive and employee-oriented working environment.

In this article, we explore the 5 main reasons why HR is critical to any successful business.

  1. Resolving Employee Conflict

As businesses grow, their workplace will naturally become more diverse. As a result of this, there will be a whole host of different personality types, working styles, level of experience and employee backgrounds all collaborating together.

This diversity will almost inevitably increase the likelihood of conflicts and disagreements, even if they are well-intentioned with wanting to do the best job possible. A HR specialist is training to handle these conflicts between employees or a manager and employee.

Part of the role of the HR department is to put measures in place to identify these conflicts before they escalate. However, if a workplace disagreement ever does reach a fully fledged conflict, then there are certain methods that can be used to resolve this effectively. It is vital that these conflicts and handled as efficiently and seamlessly as possible to boost productivity and sustain workplace morale.

  1. Inhouse Development & Training

The best way to incorporate new skills into your organisation is organically, through internal development and training. However, before any training is formalised, the HR department should draft up an extensive plan to determine what type of skills are most necessary within a workforce.

Ultimately, it is far less expensive to externally hire staff then train your existing workforce. Therefore, the HR department plays a vital role in keeping expenses down, whilst also boosting team morale through teaching individual’s new rewarding skills. Developing your existing workforce is also a key way of improving employee retention within an organisation.

  1. Keeping in Control of the Budget

It may sound obvious, but budget control is absolutely vital to the longevity of a business. Unnecessary, excessive spending can be detrimental to an organisation’s cash flow and reduce the chance for growth through financial investment.

There are various ways in which human resources can cut out excessive spending through minimising workforce management costs (e.g. through implementing a new organisational structure). In fact, many companies nowadays are even choosing to outsource their HR to save costs. HR outsourcing is a great way to free up both money and time.

Whether in-house or outsourced, HR professionals will also spend a good proportion of their time analysing the labour market. This research is vital to adjusting salaries based on employment trends and job functions – vital for both budget management and employee retention!

  1. Maintaining Company Ethos

Maintaining corporate image and implementing core business principles into a workplace is another vital role of the human resource department. Part of this is about developing a reputation as a business who makes their employees feel valued and is an overall great place to work. There is an important balance to be reached between recruiting the most appropriate and talented employees possible whilst also ensuring that the best workers want to stay at the company for years to come.

Another way in which company ethos is maintained is through seamlessly driving core business principles through every department of the business. Recruitment plays a large part in sustaining business principles through hiring staff based on the appropriate traits and also implementing the necessary on-boarding and orientation procedures.

  1. Maximising Performance Throughout the Organisation

Last but not least; maximising business performance is one of the key functions which the human resource department plays within an organisation. Many people do not quite appreciate just how much value a well-working and expertly trained human resource team can bring to the table in this regard.

Developing expert performance management systems which measure and look to optimise performance within a businesses is key here. This benefit provides a positive function for both the organisation and the employees, as individuals being given clear targets which you can obtain and be rewarded for strengthens job satisfaction.

The business itself heavily rely on the level of HR support available, and the ability of your HR team to maximise performance in this way. Having employees which continually fall below performance expectations whilst flying “under the radar” will eventually show itself through the business not  achieving their major targets.