June 18, 2021
4 min read

How Does the Role of HR Affect Business Success?

Written by
Angel Lim

Every company should have an HR department to understand how important people are in the workplace. Find out how HR can affect the overall business success.

Imagine that you do not have an effective HR team. How do you know where to find the right talents for your company? Will you have time to deal with the HR nitty-gritty when you need to focus on getting more sales?

Unfortunately, many companies forget about the importance of HR because HR mostly does behind-the-scenes work. Without an effective HR team, there is no talent in the company, and without talent, there is no business.

The employees are the ones who can bring results to the company. Therefore, it is imperative to develop a comprehensive HR strategy to ensure that your employees are aligned with the company’s values, culture, and goals.

Here are the five main responsibilities the HR team can help in your company.

1. Build a winning corporate culture

A strong corporate culture is what holds the organization together. Your culture may be your greatest strength or your most destructive weakness. As a leader, think carefully about how the organizational structure should align with the overall business strategy.

As HR has a key function of providing an organisation-wide view of employee productivity and efficiency, HR should help drive the conversation about the desired company culture to the employees. Therefore, employees will know what to expect and how to evolve to support the culture.

Forbes found that companies with a strong corporate culture have revenue growth four times than those who didn’t. A recent Deloitte survey discovered 82% of respondents believe that culture is a potential competitive advantage. A positive culture improves employee engagement, leading to better retention and higher productivity.

2. Leverage change management

Organisations must embrace change through digitalization and workplace success. When implementing a new HR software in your company, HR needs to communicate with stakeholders at all levels for better implementation and higher return on investment (ROI).

First, explain the need for change and provide the reasoning behind it. Make an impactful message by involving senior leadership and management and get them to support your change management plan to achieve business goals.

A drastic cultural shift is inevitable for a company-wide digital transformation. Employees will feel a bit lost and wonder if they can fit in. The HR department needs to openly answer their questions and frequently address how the changes will affect their roles and responsibilities.

3. Focus on employee engagement

Business success depends largely on employees. In a study done on companies with over 500 employees, 71% of managers rated employee engagement as one of the most important factors for the overall success of the company.71% of managers rated employee engagement as one of the most important factors for the overall success of the company.

The number of engaged employees can determine how active and successful the company is. Did you know that a Gallup study shows that 85% of employees are not engaged in the workplace? To encourage engagement, the HR department must recognise and reward employees for their good work.

It is an HR’s responsibility to inform management of the positive contribution of individual employees or teams so that all employees feel they play an important role in the company.

4. Identify the right talents

While financial goals are often a top priority in a top-level strategy, people and talent requirements are just as important in every organisations. Some talent goals may include attracting and retaining top talents or developing new skills.

However, only 17% of companies believe that they have the right people to execute their business strategy. HR can set specific talent requirements to ensure the company is set up successfully to execute those requirements. This allows HR to discover new skills in the talent pool to find the right people for the job.

The company spends a lot of money on finding, interviewing, recruiting, and recruiting new employees. If this person is not the right fit and leaves the company, HR needs to start the search all over again. This includes the cost of training, onboarding, interviews, and promoting the new job posting.

5. Use people insights to help improve business

Some may assume that people analytics can improve the HR function, but it can also improve the overall business function when done correctly.Over 70% of organisations use people analytics to improve their business performance.

The HR department has a unique view of the organisation and the people behind it. Through people analytics, they can have a better understanding of the talents and the way employees work.

Whether the company wants to set new hiring goals or improve engagement, the internal personnel data can provide HR with insights to help the organization make smart decisions in people development.

A critical role in creating impact for the business

Not every company understands or values its human resource department. They are the lifeblood of the company that does more than just recruiting, training, and paying salaries. That’s why it is important to have a talented and capable HR team in an organisation.

Therefore, a resourceful HR team affects all aspects of a business to get the most of the employees. Make HR a priority today.

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