Why is the Administration of Human Resources So Important?

Human Resources Management: The Strategic Factor of Business Productivity in SMEs
January 28, 2020

According to a study by the “Center for American Progress”, the flight of talent signifies an economic loss for companies of as much as 20% of the annual salary of each worker who leaves. Additionally, in the report, “Global Tendencies in Human Capital 2019”, Deloitte attests that, although companies are aware of the consequences of talent flight, they are not able to do much about it.

A survey done for the “Hays Labor Market Guide 2020” reflects the opinions of workers about the factors that they consider important if they are to remain with a company: 19% want an adequate salary, a good work environment and career progression plan; 19% motivating work; 18% good leadership and 17% flexible work hours. But what is the role of HR in all of this?

Any company progresses by means of its people, its employees. Without them, the company won’t grow. If it doesn’t have a workforce that meets all the company's obligations, the company would have difficulty taking off, and that’s where Human Resources can come into play. Often, HR is perceived as something alien to the activities of the company, however, without a good HR team, it’s almost impossible for a company to grow.

The primary mission of Human Resources is to define what people the company needs, in other words, to decide on what profile to focus upon the departure of an employee, to keep production going, for specific needs, etc.

Once the necessary people are decided upon, we come to the second objective of HR: to recruit and hire the most qualified candidates for the company, or, to select the employees who best can adapt to the defined profile. Once hired, it’s time to work on retention and long term association of the best workers with the company, which is the third mission of the HR team.

If HR has successfully completed the first three steps, they will have done a majority of what's necessary to reach its fourth objective: to make it so the employees can accomplish its business objectives. For this, it’s essential that HR participates in making the decision about the short, medium and long term objectives, and so evaluate the needs for a work force and if the company’s objectives are realistic based on its human capital. What cannot happen is to ask for miracles from Human Resources if they are working practically blind.

Also within the role of the HR team is the responsibility of rewarding the employees for their contributions to the company. This includes defining the different levels and pay scales of the organization and to decide in which level each employee is in accordance with his responsibilities, contributions and training. This will maximize the chances of retaining the best workers.

It must be remembered that offering a good salary not only goes to make the employees feel valued, but also is a way of improving self-realization and motivation, as well as building a workforce where there is good chemistry and where everyone works side by side to achieve the organization’s objectives.

Selection, recruitment, preparation, training, promotion, motivation, supervision, integration, personal development... all of these are concepts that are the daily work of any talent management program, independent of the size of the company. In the beginning, it can be a large investment, but the medium and long-term payoffs of an investment in Human Resources can be exceptional, so we must not underestimate its importance.