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The importance of human resources for a new business

For both small businesses and large corporations, the human resources department is essential for business success. Human resources perform more functions than merely handling the open enrollment season or processing payroll. Instead, this department helps to develop a company’s strategy and manages the organization’s employee-centred activities.

Budget Control

The HR department develops methods for trimming the costs associated with workforce management, thus curbing excessive spending and helping to save the company money in the long run. These methods may include negotiating better rates for employee benefits such as healthcare insurance. Also, the HR department studies and analyzes employment trends, the labour market and salaries based on job functions to ensure the company’s wages are competitive and realistic.

Employee Satisfaction

The HR department has the responsibility of satisfying employees. Since it can be challenging to measure satisfaction as it is an ambiguous measurement at best, HR specialists must carefully design employee surveys, oversee focus groups and implement an exit interview strategy to determine how the company can improve. In other words, the HR department determines the causes and/or reasons behind employee dissatisfaction for current or previous employees and addresses those issues in the best way.

Training and Development

Human resource specialists conduct assessments for the company’s employees to determine the type of training and skills employees must possess to efficiently and adequately perform their duties. Although it is vital to ensure that all employees have the qualifications and skills necessary to meet the demands of a position, new companies or businesses in the expanding stage may especially benefit from identifying training needs for existing employees.

Conflict Resolution

Given the diversity of work styles, personalities, levels of experience and backgrounds of employees, it’s a given that arguments and disagreements will happen. An HR manager or specialist specifically trained to handle relations between employees can identify and resolve these conflicts between a manager and employee or two employees and thus effectively restore positive working relationships throughout the organization. Also, being able to resolve disputes may increase employee satisfaction and boost the morale of the workplace.

Performance Improvement

Yet another responsibility of the HR department is the development of performance management systems. Without a human resources specialist to construct a plan that measures employee performance, employees may end up in jobs that aren’t suitable for their expertise and skills. Not only will this contribute to employee dissatisfaction, but individuals who consistently fall below the employer’s expectations for performance may sneak by on the payroll, thereby costing the company money on low-performing employees that are not helping the business to succeed.

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