Human resource (HR) management, often called HR or talent management, comprises all the activities companies undertake to hire, develop, and engage the workforce. And because talent is any organization’s most precious resource, effective HR management is critical to organizational success and growth.
In this post, discover why HR management is necessary for organizations, the many roles HR professionals fulfill, and how to break into this challenging and rewarding field.
In this article, we’ll explore the key reasons HR matters and the immense impact it has on an organization’s success.
The Evolving Role of HR
The role of human resources has evolved significantly over the past few decades HR has transitioned from simply being administrative support focused on payroll, compliance and basic people management, to a strategic function that directly impacts an organization’s competitive advantage
Some of the key drivers behind HR’s changing role include:
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Technological advances: HR software, analytics and automation have enabled HR to become more efficient, data-driven and forward-thinking.
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The war for talent Ongoing skills shortages and the need to attract, retain and develop top talent in competitive job markets.
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Organizational agility: HR helps organizations adapt quickly to changing business environments through strategies like flexible workforce planning.
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Employee experience: With the link between EX and performance clear, HR now leads efforts to improve EX across the employee lifecycle.
While HR teams still handle traditional responsibilities around recruitment, talent management, compensation and compliance, the focus has shifted towards more strategic priorities:
- Building agile, collaborative and high-performing cultures
- Enabling organizational success through people
- Driving business performance and revenue growth
In other words, leading HR strategy and helping maneuver the rapid change faced by modern organizations.
8 Key Reasons HR Matters
Let’s look at some of the top ways an effective HR function contributes immense value to an organization:
1. Strategic Business Partner
Forward-thinking HR leaders play an integral role in crafting organizational strategy and objectives. They provide insights on:
- Current capabilities and talent landscape
- Workforce and succession planning
- Change management requirements
- Diversity, equity and inclusion opportunities
- Employee experience enhancement
Rather than just implementing strategy, HR has a strategic seat at the executive table. Studies show organizations with strategic HR leadership are more adaptable, innovative and deliver stronger business performance.
2. Organizational Culture
HR plays a central role in shaping and maintaining a high-performing organizational culture aligned to business goals. This covers:
- Defining and communicating company values
- Fostering behaviors that reflect desired culture
- Setting clear expectations through policies
- Promoting transparency, diversity and inclusion
- Encouraging collaboration and teamwork
- Celebrating employee successes
Positive and aligned cultures boost employee pride, engagement and productivity.
3. Change Management
HR provides guidance and support during periods of organizational change. This includes:
- Communicating change impact and benefits
- Addressing employee concerns transparently
- Providing training on new processes/technology
- Monitoring adaptation and tweaking approach as needed
- Ensuring continued culture alignment
With their pulse on employee experience, HR is best placed to drive successful change adoption.
4. Compliance and Risk Management
HR ensures compliance with employment laws and regulations to mitigate legal risks around:
- Discrimination and harassment
- Wage and hour rules
- Health and safety requirements
- Employee data protection
- Third-party liability issues
Non-compliance can lead to hefty lawsuits, fines and reputational crises – which HR helps prevent.
5. Employee Relations
HR plays a central role in managing employee relations through:
- Setting clear expectations and policies
- Resolving workplace conflicts and issues
- Administering discipline procedures fairly
- Interpreting and applying labor contracts
- Building trust through transparency
- Encouraging open communication
By enhancing employee relations, HR reduces conflicts, grievances, and turnover.
6. Talent Acquisition
An exceptional employee experience starts with recruiting the right people. HR leads proactive talent acquisition by:
- Planning hiring needs and budgets
- Promoting employer brand and reputation
- Sourcing high-quality candidates
- Conducting engaging, fair interviews
- Closing and onboarding new hires smoothly
Robust talent acquisition gives a competitive hiring advantage.
7. Talent Development
Ongoing learning, upskilling and career growth opportunities enhance employee retention, performance, and succession planning. HR drives talent development through:
- Training needs assessments
- Designing development programs
- Facilitating mentorship and coaching
- Providing resources like tuition reimbursement
- Planning individual development opportunities
Developing talent ensures continued performance and future-proofing.
8. Performance Management
HR implements effective performance management processes for aligning employee efforts to organizational objectives by:
- Setting SMART goals
- Providing regular feedback and recognition
- Conducting fair performance reviews
- Linking compensation to achievements
- Identifying training gaps proactively
- Coaching underperformers
Good performance management boosts productivity, motivation and results.
The Cost of Weak HR
What happens when HR is absent or poorly managed in an organization? Some potential consequences include:
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Lower employee engagement and performance: From poor onboarding to inadequate training, weak HR fails to bring out the best in people.
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Higher turnover: Lack of career development and poor cultural fit leads talented employees to leave. Replacement costs are steep.
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Increased risk exposure: Employment lawsuits and regulatory non-compliance can arise without sound HR advice.
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Damage to employer brand: High profile employee relations issues or unethical practices give a poor external image.
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Weak bench strength: Insufficient focus on succession planning and developing future leaders.
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Loss of competitive edge: Failure to recruit and retain top talent lets competitors pull ahead.
The risks above highlight why even small teams need capable HR support. The true cost of weak HR can be enormous.
Key Takeaways
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HR plays an influential role in establishing organizational strategy, culture, change adoption and performance.
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Forward-thinking HR leaders operate as strategic business partners, not just transactional support functions.
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From talent acquisition to development and performance management, HR drives a skilled, motivated workforce.
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Effective HR is invaluable in managing employee relations, engagement, compliance and risk mitigation.
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Organizations with poor or no HR see lower productivity, higher turnover, increased risks and damaged employer brands.
Given today’s competitive, fast-changing business environment, organizations cannot afford ineffective human resource management. As this article outlined, modern HR adds tremendous strategic value beyond just the tactical employee administration of the past.
Investing in building dynamic HR capabilities pays dividends through more inspired, capable and aligned workforces. That workforce edge is what sets thriving companies apart. Good HR equals good business.
It supports employees through every stage of the employee lifecycle.
Human resource management comprises the programs and activities that support hiring, managing, and developing employees from recruitment to retirement.
Pursuing a Career in Human Resource Management
Depending on the area of specialty, HR careers can take many forms. But one thing many HR roles have in common is the potential for enterprise-wide impact. As one HR professional described: “… There is no other department in an organization with such a wide berth. HR … is involved in all levels of an organization, top to bottom, and in every function of the company.”
If you’re interested in daily opportunities to impact how employees work and interact, a career in human resource management may be an excellent fit.
Here’s what you can expect:
Jack Welch | Importance of Human Resources
Why is it important to have a good HR department?
Also, if people feel that they’re valued, they’re likely to bring more fresh ideas to the table. Maintaining a high quality of work life and protecting people’s safety and comfort is an important function of an HR department. If employees don’t feel well taken care of, they’re more likely to disengage from their work.
What is HR & why is it important?
Human resources (HR) is important for every organization that has employees, as HR handles a wide variety of tasks related to business operations. HR personnel can help recruit and retain high-quality employees that make a business more effective. HR also ensures compliance in ways related to company, state and federal rules.
Why is Human Resource Management important?
It lowers compliance and other risks. Effective human resource management helps organizations navigate the more than 180 labor laws governing how organizations hire and manage people. Aside from compliance support, HR teams also limit hiring and reputational risk through onboarding, employee communication programs, and employee surveys.
Why do companies need human resources?
They need people to run their business operations and generate revenue. Of all the resources a company uses to generate revenue, people are the most important. That’s why organizations have a dedicated department for attracting, developing, and retaining them — human resources (HR).
