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Impact of Human Resources On Organizational Performance: Why Great HR Matters

The human resources department plays a vital role in any organization.

A human resources advisor is responsible for recruiting, training, and supporting employees. They also play a key role in developing company culture and keeping employees happy and productive.

5 Ways Great HR Impacts Organizational Performance

Human resources staff may not be involved in your company’s core operations, but that doesn’t mean their contributions aren’t essential. Here are five ways that a well-run HR crew contributes to a thriving organization.

Attract More Skilled and Qualified Talent to Your Business

Human resources staff are experts at recruiting, interviewing, and hiring new employees.
An HR leader isn’t simply a people person with a good eye for talent. Typically, HR staff holds a degree in one of these fields:

  • Human resources management
  • Industrial and organizational psychology
  • Business administration
  • Communication

Experienced HR professionals have been trained in the logistics of hiring. They also possess the interpersonal “soft skills” required for navigating this sensitive process.

After learning the ins and outs of your industry, HR team members are uniquely prepared for evaluating the talent and background of potential hires.

Reduce Turnover

A high employee turnover rate can derail your company’s progress. Constantly having to hire and train new employees drains your team’s time and budget.

The estimated typical cost of replacing an employee is between one-half to two times that employee’s annual pay. In other words, replacing an employee who was paid a $60,000 salary may cost their employer between $30,000 and $120,000. These costs stem from hiring expenses, paid training time, and the loss of the original employee’s productivity.

When your staff feels that your HR department is invested in their well-being, they’re more likely to stick around. Feeling supported by HR helps staff view challenges as fixable, short-term issues, rather than potential reasons for leaving the company.

Spend Less Time on Administrative Tasks

A highly-skilled HR team is equally adept at managing employee morale and tackling the company’s most time-consuming logistical tasks.

Running a large team involves a major administrative effort. Every single employee represents a number of ongoing administrative tasks. From managing pay and benefits to coordinating staff events to facilitating communication between departments, a great HR team is an administrative Swiss Army knife.

When your HR team is effectively managing your organization’s admin tasks, other team members can spend more time on their core duties.

Reduce Workplace Conflicts and Liabilities

Some of the most important and sensitive work performed by an HR team involves navigating conflicts and liabilities.

Sometimes, an employee’s conduct requires disciplinary measures or termination. In such cases, a company’s leaders need an HR team that they can trust to handle the process swiftly, gracefully, and in accordance with applicable laws and policies.

Additionally, human resources is the only department that’s equipped to take the lead in addressing many serious concerns that arise, such as:

  • Interpersonal conflicts
  • Sexual harassment or bullying accusations
  • Safety issues
  • Mental health crises

When these problems arise, a human resources team creates a professional buffer between employees and management. This division benefits both parties.

Employees can feel comfortable divulging sensitive information to HR with the assurance that their rights and well-being will be protected. For management, liability is reduced when HR professionals handle sensitive issues using standardized, legally-compliant procedures.

Efficient Compensation and Benefits

An HR team is typically involved in or responsible for these administrative areas:

Appropriately compensating employees is a delicate balance between your budget constraints and the need to retain talent. An HR team provides a company’s leaders with evidence-based strategies for calibrating employee compensation.

Along with good pay, a strong set of benefits improves employee satisfaction. However, developing a comprehensive benefits package is complex.

Health care, retirement plans, and paid time off all need to be fair and appealing to employees without exceeding the company’s capacity. HR teams create benefits packages that align with the goals of the management team while also addressing the needs of the staff.

Get Better HR for Your Capital Region Business

For across-the-board improvements in your organizational performance, partner with TBM Payroll for your total human resources needs.

We’re located in Glens Falls, Warren County and we work with business leaders throughout the New York Capital region.

Our team can help you to streamline administrative tasks in a scalable, efficient, and cost-effective manner. To learn more, contact TBM Payroll today.