Think of a company with the best product, an inspiring mission on the cusp of a technological revolution, and a wonderful technical infrastructure, and yet, low morale, ambiguous leadership, and a turnover rate at a startling 35%. Can it truly thrive? The answer, resoundingly, is no. This is where Human Resources reveals its maximum utility.
Table of Contents:
Be it a rapidly growing startup in Bengaluru or a huge business group in Mumbai, the sphere of activity of a human resource department is not limited to filling in forms and writing checks. HR is the primary and foundational department that nurtures and fosters the real capital of any organization and its people.
But first, let us look at what HR is, why HRM is important, and what it is doing to bring success into the organization.
What Are the Roles of HR? [More Than Just Hiring and Firing]
The human resource department is responsible for acting as a mentor, a compliance expert, a troubleshooter, a revolutionary agent, and a cultural architect. Modern-day HR department performs several responsibilities in several top functional areas as follows:
- Talent Management and Development: This is followed by getting the right talent to the company’s workforce. However, beyond recruitment, HR guarantees that newly hired employees are introduced and trained properly along with the company’s values within a few days of joining.
- Performance management: HR creates and implements methods of appraising people and performance that are unbiased and rooted in a way that supports the organization’s strategic vision. They help in making sure that employees are not only assessed but also trained.
- Employee Engagement and Organizational Culture: Every organization’s dream is to have the employees adhere to the part of the company’s premises. The functions of HR include ensuring the company has a healthy work culture, a general oversight of the staff morale, and a survey and spearheading of morale-boosting activities within the workplace.
- Human Capital Development: The new way of developing the workplace is upskilling employees. Human Resources is responsible for evaluating the existing competencies and creating talent management plans to prevent skills gaps.
- Compliance & Policy Implementation: Doing business in India is challenging, especially with labor laws alone. Thus, HR maintains the legal compliance of the organization, to the benefit of both the company and its workers.
- Industrial Relations: It involves handling employees’ complaints, and protecting their rights but at the same time ensuring that the employer’s rights are protected as well.
These roles, if well coordinated, serve as core pillars of an organization’s growth.
Why Is HR So Important for Growth of an Organisation?
True to the popular adage, ‘people are the heart of any organization’, the HR team is playing an immensely more strategic role than ever before. The importance of human resources are as follows:
1. Improving Retention and Cutting Costs
An SHRM India 2023 report reveals that organizations that offered good and strong HR practices had up to 28% less turnover when compared to organizations with negligible attention to HR functions. Lower attrition brings cost savings in recruiting new employees and prevents organizational knowledge.
2. Enhancing Productivity
According to Gallup’s Global Workplace 2022 report, work engagement leads to improved organization profitability by 21%. Measures driven by HR that include employee appreciation, managing stress, and career development also fall under this category.
3. Bringing Organizational Resilience
It is now imperative to assess the situation and examine that even in the post-pandemic, hybrid environment, HR has a strategic role. Mercer reported that 81% of Indian businesses have acknowledged that HR provided an effective way of managing the workforce, flexibility at work, and employee wellbeing after COVID-19.
4. Nurturing a Culture of Innovation
Hence, a well-supported HR function enables psychological safety, which is the foundation of innovation. When employees are free to suggest ideas, experiment, and make mistakes, innovation happens. HR policies around open communication, feedback mechanisms, and recognition fuel this innovation culture.
5. Following Diversity, Equity & Inclusion (DEI)
Diversity at the workplace cannot be a passing cloud, it has to be cultivated by HR right from recruitment and promotion to DEI training. According to McKinsey, diverse organizations have a better probability of performing 35% higher compared to other companies. In the context of the Indian workforce, it becomes even more critical to have such a position.
6. Enhancing Employer Branding
The best talent is drawn to companies that demonstrate their commitment to employee development, well-being, and function. However, HR is responsible for building that story through social employer branding, employed influence, and open corporate collaboration. Consistent employment branding makes it possible to find the right talent quickly and ensures super-loyal workers stay with the company.
Major Consequences of Lacking Strategic HR
Are you not involving your HR at the leadership table? What do you risk in such a case?
- Culture collapses due to misaligned values and a lack of shared purpose.
- Legal issues arise from failure to adhere to the ever-changing Indian labor laws, resulting in fines or damaging the company’s image.
- Struggling to retain talented employees as they may leave for well-paying organizations–promising them insight, growth opportunities, and meaningful work.
- There will be reduced innovation when learning and development are treated as afterthoughts.
- Lack of social support structures or effective work-life balance measures and other similar work-related burnouts.
These aren’t theoretical risks, they’re real and costly outcomes of underestimating the importance of human resource management. With strategic HR, organizational performance is decreased by missing the fundamental element needed to support growth.
You may record short-term success, but realizing the essence of HR and corporate culture makes you work toward long-term goals and annual performances. Many organizations lack a robust presence of the HR function in the key decision-making forums. Such gaps cannot be addressed no matter the investment made in people technologies.
Wise organizations understand this and do not just invest in HR, but they get into HR as a power lever for organizational resilience and development.
In Conclusion: HR Is Indispensable
Let not HR be seen as only paperwork or a birthday celebration. The current human resource managers are business allies, culture builders, and change-makers. Often unheard and unnoticed, they are the backbone of the organizations that are responsible for the act of hiring, the act of care, and the act of empowering the people.
To Indian HR professionals, this translates into the understanding that their work is valuable and important. From solving employee queries to developing employee relations and strategies in future-oriented organizations, human resource management makes more sense than ever.
The next time someone asks, “Why does HR matter?” tell them that the human resource management sector works so diligently behind the scenes every day.