Importance of a Human Resource Department

QUESTION 1 Justify in detail the importance of a human resource department. 

            The most important reason why there should be an HR department for every company is valuing human capital.  An in-house human resources staff or a human resources expert on staff can increase the understanding of how important human capital is to the company's bottom line. Small businesses may think an HR department is something that they can forego but for them, human capital is very critical since many of their employees perform cross-functional duties. With a smaller workforce, if just one person leaves, it leaves the company with a huge gap to fill and a potential threat to the company's profitability, that’s why an HR expert in the staff, at least, can pick out correct candidates who can multitask and do the different cross-functional duties required.

            The second most important reason is the ability of the HR department to curb  excessive spending by developing ways of trimming workforce management costs.  This includes negotiating better rates for benefits such as health care coverage. Furthermore, human resources ensures competitive and realistic wage-setting based on the prevailing labour market, employment trends and salary analysis based on job functions. For small businesses have budget constraints, this human resources function is especially helpful.

            Another important task of an HR department is conflict resolution.  Obviously, workplace conflict is inevitable, given the diversity of personalities, work styles, backgrounds and levels of experience among employees. A human resources manager who is specifically trained to handle employee relations matters can identify and resolve conflict between two employees or a manager and employee and restore positive working relationships. 

            Another importance of an HR department is determining the type of skills training and employee development necessary for improving skills and qualifications. Companies in the beginning or growth phases can benefit from identifying training needs for existing staff. It's much less expensive than the cost to hire additional staff or more qualified candidates. In addition, it's a strategy that also can reduce turnover and improve employee retention.

            Making sure that the employees are satisfied, is another responsibility of the HR department.  With carefully designed employee surveys, focus groups and an exit interview strategy, human resources determines what underlies employee dissatisfaction and addresses those issues to motivate employees.  Furthermore, hiring new employees or replacing old ones, can be expensive, especially small businesses. With a well-constructed recruitment and selection process, the HR department can minimize expenses regarding advertising job postings, training new employees and enrolling new employees in benefits plans.