10 Reasons HR Is Important to an Organization

Businesses of all sizes need to hire skilled people, get payroll out on time and comply with state and federal workplace mandates. Someone in your organization must be properly trained to perform these human resource functions. Without HR know-how in your organization, you risk losing valuable workers and increasing your exposure to penalties and lawsuits.

Workplaces need policies and procedures so that everyone follows the same rules and knows what’s expected of them. The human resources department works with management on drafting sick time, paid time off and vacation policies. As the enforcer of workplace rules, HR lays out the penalties for absenteeism, lateness, dress-code violations and ethics breaches. HR also publishes the employee handbook and may require employees to state in writing that they read and understand it.

Hiring mistakes are costly for businesses. HR professionals are trained to spot candidates who lie on resumes or inflate their qualifications. They perform background checks to screen out undesirable candidates. They also know what interview questions are illegal, including those related to age, religion and marital or family status.

Employees who are short-changed in their pay, not paid on time or not paid for work completed can file a complaint with the National Labor Relations Board. A competent HR and payroll department lessens an employer’s chances of running up against the NLRB, state and federal labor departments and the IRS. Employment mandates cover such issues as hourly wages, overtime, employee benefits deductions and payroll taxes.

Health care coverage, workers’ compensation and retirement packages are big expenses for organizations, especially smaller businesses. HR staff members negotiate with benefits plan administrators and sponsors for the best prices. Benefits might also include employee assistance programs, disability insurance, health and wellness screenings and discount programs.

HR managers see that employers comply with state and federal employment laws. These mandates cover family medical leave, sexual harassment, pay equity and discrimination based on race, gender, age, religion or disability. The HR department provides employers guidance on complying with applicable laws.

Organizations must maintain a safe environment for workers. HR collaborates with security personnel to enact emergency evacuation plans and curb workplace violence. The department also tracks relevant Occupational Safety and Health Administration regulations, trains employees on safe work practices and prepares the company for safety audits.

HR oversees layoffs and terminations. One goal is to minimize the company’s risk of being charged with unfair firing practices or committing layoff violations. Another goal is to ensure that exiting workers are treated with respect and dignity.

Employee productivity drives the demand for products and services. HR surveys employees to gauge their satisfaction at work and sometimes conducts exit interviews with departing workers to uncover practices that lower productivity.

HR managers mediate employee conflicts. This peace-keeping role prevents conflicts from lowering productivity, turning violent or making termination necessary.

Organizations want employees to know what performance standards they’re expected to meet. Business heads look to HR to help set performance standards and administer formal appraisal procedures to fairly and objectively rate managers and staff.