The Importance of HRD

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Human resource development (HRD) is an essential component for growth and economic development. It can occur at both the nationwide level and the firm-wide level. The enhancement of HRD of a country is dependent on the government and national policies, while at the firm or micro level HRD can happen through training and efficient utilization of resources. Resources are efficiently utilized to support HRD when the maximum benefit is created at the lowest possible cost.

Economic Development

As the human resources of a country develop, the country progresses and the benefits spread all over the country. Better skilled and well-trained human resources attract a larger foreign direct investment into the country and improve the brand image of the country internationally. HRD for an economy is dependent on the economic policy of the government and the effort by the institutions in the economy to actively participate in the development process.

Increase in Entrepreneurial Activity

Human resource development may occur as a result of better education, training or development of vocational skills for individuals. This activity results in an increase in entrepreneurial activity due to the creative process that is encouraged by HRD. Moreover, even in an economy faced by high levels of unemployment, vocational training can generate substantial number of entrepreneurs who look for self-employment. Thus, HRD opens more options and wider avenues of success for individuals.

Increase in Productivity

HRD leads to better and efficient utilization of the available resources. The same numbers of individuals are able to improve their performance through training or learning of more productive skills. This leads to an increase in productivity in the same company at the firm-wide level and to an increase in the overall value of goods produced at the country-wide level. An increase in productivity of employees generates high economic progress for the country.

Counteracting Social Taboos

HRD can lead to a change in social perception of many people and can result in the development of the society. Better educated and skilled workers can think and act more constructively and result in a change of the social environment. Improved education leads to self-awareness and prevents individuals from embracing superstitions.

Human Rights

A better trained and educated workforce is well aware of its rights and is better able to protect against human rights violations. Workplace environments improve and workers rights are acknowledged with HRD.


At the firm-wide level, HRD leads to increased productivity and better client service. This leads to increased revenues at reduced costs for the company. Most companies today are focused on hiring a well-trained and competitive workforce in order to develop a unique selling point and enhance their profitability.

Demographic Effect

HRD results in more households with two working parents. This provides enhanced income for the household and at the same time reduces the time available to parents for raising kids. As a result, a better educated workforce results in a smaller increase in the population of the country. For countries like India, HRD can help prevent the population from increaseing beyond control.


  • "Human Resource Development"; Jon Werner and Randy DeSimone; 2008
  • "Human Resource Development: Today and Tomorrow"; Ronald Sims; 2006


  • "Global Human Resource Development"; Micheal Marquardt and Dean Engel; 1993

About the Author

Kevin Sandler started his writing career as an academic researcher in 2005, and has since than been involved in writing for various magazines and academic specialists including Academic Knowledge, Scholastic Experts and eHow, among others. His specialities include personal finance, investments, business and project management. He has a Master of Science in finance from Tulane University, and is actively involved in the finance profession.

Photo Credits

  • graph of development image by Attila Toro from