Why Does HR Matter Today More Than Ever?

In many companies, the HR department is a behind-the-scenes champion. The work of HR professionals is essential to keep business operation running smoothly, but it isn’t always noticeable and glamorous. It’s often described as a thankless job. Some leaders don’t fully realize how crucial HR is to the success of their company. Underestimating the importance of HR is, indeed, a serious mistake!

But why is HR very important?

HR is more than just hiring or firing. Its ultimate goal is to help the company achieve its purpose by attracting the best talent and motivating them to perform at their best. To fulfill this goal, HR focuses on leadership development to ensure that the company has the right people to perform leadership roles at all levels. The more effective your leaders are, the more engaged your employees become, which can lead to higher level of productivity and more valuable contributions. HR can have a significant impact on empowering leaders to use their skills and support your company’s success.

Another significant goal of HR is to enrich the employee experience, which in turn helps improve the company’s performance. HR is not only writing policies that employees should follow, but it’s also interacting with every level of management, from immediate supervisor to executives, so that all managers are equipped with the necessary information to make the best use of employees, reduce turnover, and boost employee morale.

Aside from its transactional functions such as administering payroll and benefits , processing job applications, handling grievances, compliance with government regulations, resolving inter-office conflicts, and maintaining 201 Files, HR specializes in key areas of responsibilities such as job architecture, learning and development, performance management, recognition and rewards, succession planning, and building leadership skills that includes mentoring and coaching. These functions provide an opportunity for HR to transition from just being an administrative and support department to being a proactive business partner that really makes a difference within the company.

HR uses technology to deliver its services more efficiently, for instance, company portals that allow employees to self-administer benefits plans, online testing to prescreen job applicants, streaming desktop video to facilitate distance learning and onboarding, internet and network monitoring to track employees’ performance, HRIS, payroll software, and other technology applications. As in other areas of your business, technology is transforming HR. To keep up with the competition, make sure your company is taking advantage of the latest tools.

Finally, HR plays a role in developing company culture. First, as the gateway for new employees, HR communicates the company’s values and expectations to lay a good foundation. Second, as the bridge that connects the people in the company, HR can facilitate communication and drive performance. Third, HR delivers efficient and fair administrative services to employees that can create a sense of teamwork and a happier environment for everybody.

Today’s HR practitioners are positioned to take on a more strategic role in achieving the mission and vision of the company. They are now developing a sound working knowledge of various aspects of the business such as how to impact revenue growth and productivity, and are implementing programs that will enhance the bottom line. They accomplish this through a collaborative effort with the company’s finance professionals. HR practitioners are also fast becoming innovative, partnering with marketing executives in promoting employer branding and enhancing customer relationship.

Based on the foregoing, you can readily say that HR really adds value to the company as a whole by boosting profitability and performance in measurable terms. To this effect, HR practitioners need to develop new and broader competencies. They must also learn to speak the CFO’s language.

Do you still wonder why HR has a seat in the C-Suite, why HR Manager is now reporting directly to the CEO, and is getting higher salaries and bigger budgets?

Simply put, HR has multiple roles that other departments cannot perform.  And that is why HR truly matters.

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