Why Every Business Needs an HR Department


For both small businesses and large organizations, the human resources department is a very important one for business success. Human resources is a department that is responsible for much more than simply handling the job applications or processing payroll weekly or monthly. HR is a department that can work to develop the strategy of the company and handle all employee-centered activities related to the business. Some of the top reasons why HR is just so important to the success of any company are:

Employee Satisfaction

If you’re running a small business and hiring your first employees, the satisfaction level of your team will make a huge difference when it comes to how successful you can be in the future. The HR department is tasked with determining whether employees are satisfied with their job, related duties, and their management team. Since satisfaction can be quite an ambiguous thing to measure, HR professionals will try to gauge the satisfaction of your team by arranging and overseeing employee focus groups, designing employee surveys, and putting together strategies for exit interviews to find out more about what the company could do to improve when it comes to just how happy employees are in the workplace. If you want to get your small business off to the right start when it comes to the employee satisfaction of your team, outsourcing can help. This article on outsourced HR from G&A Partners offers more information.

Budget Control

The HR department can also help with budget control in many different ways. This department is responsible for reducing any costs that are associated with workforce management, helping to reduce any excessive spending and make sure that the business saves money in the long run. They may be in charge of negotiating better prices for employee benefits such as healthcare insurance or retirement plans. The HR department will make sure that professionals are up to date with the latest employment trends, salaries and the labor market based on the functions of a role to ensure that you are paying realistic, competitive wages to your employees. This HR function can be especially useful for small businesses that have to stick to a strict budget. 

Development and Training

Human resources professionals will also conduct employee assessments in order to get a better idea of the type of training and skills that they might need in order to perform their job duties efficiently and get the best results. While they will ensure that all employees are qualified with the necessary credentials to meet the demands of the position that they were hired for, companies that are new or expanding might also benefit from having the HR department spend time identifying training needs for current employees. It is often most cost-effective for HR specialists to handle the training and development of current employees compared to hiring new, more qualified candidates. Along with this, it provides current employees with the opportunity to grow within the company, which often boosts job satisfaction and employee loyalty. 

Performance Improvement

The development of performance management systems is another business area that the HR department will mainly be responsible for. Without human resources professionals to construct plans that measure the performance of employees, it’s all too easy to end up putting people in jobs that are not the best fit for their skills and expertise. This can lead to disastrous results for everybody involved including reduced employee satisfaction, more frustration, and results that consistently miss the mark when it comes to your expectations for performance. As a result, this could cost the company more money than it needs to be spending on low-performing employees who are in the wrong role and not helping the business to succeed. 

Conflict Resolution

Regardless of how satisfied employees are with their job roles, there is always going to be some conflict in the workplace from time to time. Given that employees tend to have a diverse range of work styles, experience levels, backgrounds, opinions and personalities, it’s not surprising that disagreements are going to take place at times. A good HR department can provide professionals who are specially trained to handle these disputes between employees. They will be able to identify and resolve conflict between different employees and make sure that working relationships throughout the business are restored. Workplace conflicts that are resolved quickly and easily may increase workplace morale and employee satisfaction. 

Employment Law

Another key reason why every business needs an HR department is that HR professionals are experts in employment law. All it takes is one small mistake when you are hiring or firing an employee, and your business could be facing a lawsuit. If you’re not as clued up on employment law, you could be putting yourself and your business at risk without even realizing it. An HR professional can help your business remain compliant with all state and federal employment laws, helping your business to avoid conflicts and lawsuits. Along with this, your HR department will be aware of the posters and notices that you will need to display in the workplace. Businesses are typically required to make information about OSHA, FMLA, and USERRA readily available, and you may also need to display information about worker’s compensation, minimum wage, unemployment insurance and more. 

Manuals and Handbooks

Finally, another function of the HR department is to ensure that all employees have access to the information that they need to do their jobs well. In many cases, this can be done through providing them with an employee handbook or manual. Even if you only have a few employees, providing them with a handbook can be an effective way of making sure that they are aware of all regulations, rules and expectations along with providing them with any information that they may need in a wide range of situations. A handbook or manual can be very useful for makings sure that employees know what’s expected of them at work, and they can also be useful in the case of disputes. 

HR is a department that is often overlooked, but the truth is that without this department, a business will be at a disadvantage. 

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