The role of human resources function has significantly changed over the years. It is much more than mundane administration, piles of HR forms, and employee record entries.
Human resource now works alongside business owners and leaders as Business Partners and play a strategic role in a company’s success. A strong HR function acts as a bridge between managers and employees. Moreover, they are responsible to manage workforce concern, and legal compliance and maintaining employee well-being interventions.
Let’s discuss the purpose and significance of HR for a business in detail.
Purpose of HR Function in a Business
The most priced asset for a business is its employees. No business can survive without a dedicated and motivated team of individuals working for it.
The primary goal of an HR function is to ensure employee rights and sustain moral, ethical, and legal standards of work.
Below are a few reasons why having a sound HR function is vital for a business:
- Strategic HR Management
HR benefits the bottom line of a business and establishes a strong connection and alignment between business and employee goals.
- Benchmarking Total Rewards Policy
An expert benefits and compensation professional will benchmark the total reward and compensation structure of the business with existing industry practices.
- Employee Engagement Initiatives
The human resource function creates and implements employee engagement initiatives and interventions to maintain healthy a culture and work environment.
Legal Implications and Non-compliance of Federal Laws
One of the major HR roles is to ensure compliance with federal and state employment laws. Below are a few examples of workplace laws every business owner and HR personnel should know:
- The Equal Pay Act of 1963
EPA prohibits employers from practicing sex-based wage discrimination.
- The Americans with Disabilities Act (ADA)
As per ADA, discrimination against a qualified person with a disability is forbidden.
- The Pregnancy Discrimination Act of 1978
The PDA prohibits discrimination against pregnant women.
Non-compliance with such mandatory laws can result in heavy penalties, fines, lawsuits, and even closure for a business.
Human resource functions devise policies that protect employee rights and interests. Furthermore, they advise business owners to comply with compulsory laws to avoid litigation and damage to the company’s image.
Consequences of Poor HR Practices
Companies with well-established HR functions thrive and grow. Similarly, poor HR practices can lead to serious consequences in the long run for a business.
- Incompetent Workforce
Poor recruitment and talent acquisition processes can lead to hiring an unqualified and incompetent workforce. Moreover, it can also result in inadequate manpower planning, mismanaged onboarding, and incomplete background checks.
- High Employee Turnover
A good HR function paves the way for managers and leaders to maintain trust, seek feedback, and maintain transparency. It is impossible to achieve without proper guidance from HR.
An increase in employee turnover is a result of proper processes, employee dissatisfaction, communication gap, poor work-life balance, and low morale.
Final Thoughts
The importance of a human resource function in a business cannot be overlooked. It is vital for company growth, high employee morale, and to maintaining compliance with employment laws. Additionally, poor HR processes can lead to employee dissatisfaction, turnover, and negative workplace culture.
