Human resource development, or HRD, relates to the activities your small business uses to create more knowledgeable and skilled employees who will benefit overall company performance and growth. These activities can range from training and mentoring workers to monitoring performance and planning for promotions.


HRD is important for determining your employees' strengths and weaknesses so that you can offer ways to improve employees' skills and prepare them for future roles and demands. It's also important for reducing turnover, assisting with your business's development and gaining a competitive advantage.

Importance of HRD in Staffing

One of the objectives of human resource development is to acquire higher-quality staff and reduce the costly effects of turnover in your business. When your business is known for nurturing employees' skills and helping them reach their career goals, you'll find that you have a better applicant pool for new positions since you'll be attracting employees who are dedicated to improvement and growth.

In addition to improving how your company is seen in the industry, your business's dedication to HRD will help make current employees more loyal so that they're less likely to miss work, slack off or leave your organization.

Use in Succession Planning

Since HRD relates to training and mentoring employees for learning new skills and moving up the career ladder, it's very important in succession planning since it provides an opportunity to focus your efforts on preparing the strongest employees for higher positions that open up in the future.

The performance monitoring involved with HRD gives you a chance to closely evaluate employees' aptitudes, behaviors and skills so that you can create a list of those who can fill in key roles as needed. Even if you have some employees with weaknesses, you can use training and coaching to improve their skills so that they're promotable as well. At the same time, you can save on some of the recruitment costs when you promote internally based on your efforts.

Impact on Employee Performance

Since one of the functions of HRD is to create more engaged and dedicated employees, it's also important for improving overall employee performance. When your employees feel that they have a future in your company and get to complete training activities that interest them, they'll become more engaged.

You'll see positive benefits in customer service, employee relationships, overall productivity and work quality. In the end, highly engaged employees save you time and money since they can increase their output and even bring you more customers.

Importance in Business Development

HRD is also important for developing your business in the present. Whether your company sells products or offers services, your employees will be the heart of your organization. Ensuring they have the proper skills and continually monitoring their performance is essential for gaining and keeping customers and establishing your company positively in the community.

To ensure long-term profitability, you'll also need to use HRD to prepare for the future of your business. Whether that involves planning for future leadership, creating new product or service offerings or preparing to respond to major changes in your business's industry, you'll need to use HRD activities like training programs to create a workforce and company culture that will lead to success.

Importance in Competitive Advantage

The importance of human resource development can also be seen in how it can give your company a competitive advantage. In addition to how a focus on developing employees can give you a superior workforce, it also helps you ensure your company is prepared to meet demands and challenges in the future.

Well-developed employees also provide the performance and cost benefits that can help your company produce more at a lower cost than competitors and attract more potential customers.