Have you or any of your peers in the business world ever asked yourselves: What’s the purpose of human resources (HR)? And why should we value it?
For starters, the purpose of HR is to provide the structure for your organization and serves as the engine that keeps it running smoothly on a daily basis.
It governs important aspects of your business, such as:
- The people on your team
- Workplace culture
- Policies and procedures
- Compliance with employment laws
All of these can have a major financial impact on your organization, as well as other ramifications. If done well, HR can help you:
- Acquire and keep the type of top-tier talent on your team that produces quality work, strengthens relationships with customers and enhances your company’s reputation
- Maintain a positive, productive working environment
- Avoid legal trouble
- Find innovative, more efficient ways to conduct business
- Boost your bottom line (the natural byproduct of all the above benefits)
Without a doubt, every organization needs an HR presence.
And as your company increases in size and complexity, HR becomes more crucial. This is especially true regarding compliance with the many ever-evolving laws on the federal, state and local level.
HR tasks vs. strategy
The bare minimum HR functions any organization should have in place are:
- Recruiting and interviewing
- Processing payroll
- Enrolling employees in benefits and administering benefits programs
- Performance management and training
- Disciplinary actions and terminations
These are tactical HR functions in that they involve basic, day-to-day tasks. This is what most people think of when they hear “HR.”
On their own, these tasks bring strong value to your organization. These are the tedious and complicated – but always necessary – administrative responsibilities that must get done.
Now let’s compare HR tactics with HR strategy.
HR strategy is the next step that many organizations don’t fully leverage. HR strategy is about the bigger picture – the long-term goals for an organization and how the HR function aligns with them and can help to achieve them.
Unfortunately, many employers don’t connect HR with transformational, profit-inducing ideas. This may be because employers don’t always recognize the inherent value in the more intangible ideas associated with HR, such as employee satisfaction.
And yet, this is where HR can really bring tremendous value to your organization. Here, the potential is unlimited.
Examples of HR initiatives that are part of a larger organizational strategy:
- Increasing workers’ productivity
- Enhancing employee engagement
- Changing the workplace culture
- Achieving greater diversity in the workforce
- Improving the quality of hires
- Identifying and bringing on talent that can help an organization grow into new markets or locales
- Reducing safety incidents
- Incorporating new, efficiency-driving technologies
- Preparing your organization for the departure of key personnel (succession planning)
- Better protecting sensitive employee data and valuable company intel
Why every business needs an HR strategy
If you’re still asking, “What’s the purpose of human resources,” let’s state the answer plainly:
Your organization probably won’t be successful for the long term without an HR strategy.
Without an HR strategy, your focus is merely on getting by – on completing the HR tasks that have to get done each day, and then moving on to the next set of tasks to check off. It’s like having tunnel vision.
Meanwhile, you’re missing out on all the opportunities happening around you.
For example:
- Potential for growth
- Possibilities for gaining new business
- Unique networking opportunities
- Means of obtaining better exposure
- Ways to improve recruiting and employee retention
- Improvements to training and development
- Potential for changes in the legal landscape
- Introduction of new technologies
Let’s explore a few real-world scenarios involving HR strategy – and the repercussions of not having one – in more detail.
1. Compliance
Without an HR strategy for compliance, it’s probable that you’ll unknowingly violate laws. Just a single violation can result in:
- Fines
- Audits
- Bad publicity
- Other punitive measures, such as community service
Competitors could use this information against you, either to win business or to persuade an employee to work for them instead of you.
2. Employee development
Without an HR strategy for employee development, your recruiting and retention can suffer. Employees want their employer to invest in their development – they want to better themselves and they want their company to support them in that effort.
By not having any strategy in place for developing your talent, you risk losing them to another company that is willing to do this and does have a plan in place.
This could entail:
- Internal development opportunities
- Tuition reimbursement or payback benefit
- Both
The latter option isn’t just the most desirable outcome for employees – it’s what many have come to expect.
3. Employee engagement and satisfaction
An HR strategy for employee engagement can lead to a more productive staff. HR is critical for developing and encouraging employee engagement and satisfaction.
This is important from two perspectives: You don’t want to lose valuable talent and have to shoulder the additional costs of recruiting and training a new person to fill their role, and you don’t want an actively disengaged workforce.
Both situations can be extremely destructive by reducing morale across the office, either spreading their disengagement or causing other employees to burn out or become frustrated from picking up extra work.
Your customers can often feel the lack of morale and will surely notice the inferior product or service delivered to them by a workforce that has stopped caring. Now, you could not only lose employees and talent, but your customers as well.
The bottom line: Without an HR strategy, you’re simply not being proactive or visionary.
The market is constantly shifting. There’s always another competitor out there that’s poised to do something better than your organization. To survive the marketplace, you must continue growing and adapting your approach.
In summary: What’s the purpose of human resources?
So, what’s the purpose of human resources?
It’s vital for establishing and maintaining structure and consistency across your company.
Your organization, regardless of its size, needs an HR presence – one that goes beyond the minimum, day-to-day requirements, though these are critically important. Your HR presence should include the strategic element that can help your organization achieve its goals and successfully take it into the future.
For more information on what a sound HR strategy does (and doesn’t) look like, download our free e-book: 7 most frequent HR mistakes and how to avoid them.