Benefits of Human Resource Management

Regularly I am asked the same question, ‘Why should I use human resources for my company?’ It is a simple and yet astonishing question. It has been asked by many managers in various companies. In this day and age of the most serious recession since ‘30s one cannot but take human resource management seriously. It is essential for the survival of any company to genuinely engage in personnel management. People are the most essential asset any company has, without people there could not be a vibrant company. People are at the core of every business and as such human resource management is essential for managing business performance.  If your human resource management department does not add value to your business and only engages in paper pushing start questioning what they are about! Personnel Management should add value and drive your business forward!

There are a number of activities in which HRM can add value to your business. Here are some HR activities you should engage in: -

Ø  Recruitment

In these days of labour oversupply it is essential to recruit the right people for your company. You need people who give your company a competitive edge and add value to their activities. It takes skilled interviewers to assess these candidates and it takes professionals to know where to search for these people.

Ø  Training Development

In the fast changing economic, technological and business environment you need to train your staff to keep ahead of the competition and to keep up with recent developments. An experienced person who can assess your training needs and who can set up training plans tailor made for your organisation’s needs is indispensable for any successful organisation. Training and development is essential in developing your staff  to be able to more with less.

Ø  Labour Productivity

You need to measure annually the labour productivity of your labour force. Compare your labour cost with market rates and organise flexible reward strategies, which suit the financial restrictions of your company.

Ø  Performance Management

Every top performing team has a strategy on how to keep improving the performance of every team and staff member in its organisation. Performance management is not about appraisal forms but about engaging members in how to increase their output and improve company revenue.

Ø  Equal Opportunities

Modern organisations source their talent through diversity and have a mixture of nationalities and backgrounds. Working together these people come up with more creative answers to contemporary business dilemmas. Organising diversity and equal opportunities are not just fancy ideas they give business a deeper understanding of the global business environment and an extended pool of talent and resources.

Ø  Disciplinary Matters

Effective management of a workforce also includes weeding out the underperformers. Too many organisations are ineffective at this and create costly and complicated management structures to avoid the mistakes of a few. However, some organisations are too strict in discipline and scare the hell out of a good workforce. A balanced and effective approach is essential which you should achieve with the professional support of HR.

Ø  Social Legitimacy

These are the simple but important little things such as compliance with all legislation: employment, social, H&S, finance and corporate governance. It is about the importance of your company’s reputation with the people in the region where you operate and in the business world.  It about the trust you instil in your workers and the fairness by which you treat them. These are little things but if they are done well they will yield your company large benefits in the long term.

I hope it has become clear why it is indispensable to engage in personnel or human resource management and that good HR management will force your company forward. If you are not sure if your HR department is doing this for you, ask yourself why this is? Because HR should energise and vitalise your people and business!

HR Administration

One of the main functions of HR is to protect the company from unnecessary litigation. Any company is exposed to threats from employees who want to bring claims against the company for either valid or spurious reasons. A Chief Executive wants peace of mind that the foundation of the company is solid and that spurious claims have no chance and the valid claims against the company don’t happen because HR and management makes sure all policies are sound and that management and HR adhere to them. 

There is a need for companies to organise the administration of the human resources well. This doesn’t always happen, very often it is neglected, especially in Small and Medium Enterprises. What does it mean to organise the HR administration well? Make sure every employee has a valid signed Contract of Employment, has received an Employee Handbook, that employees understand and follow the HR policies and other policies of the company, that employees are made aware of the company pension arrangements and receive a company induction at the start of their tenure with the company.

It is a deliverable of human resources to ensure that companies do not get unnecessarily exposed to risks in the field of HR administration. However during my visits to small and medium enterprises I very often encounter situations where the company has contracts but unfortunately not every employee got one. This is a shame if you have good contracts and policies they should be distributed to all employees and you should be able to prove that the employees received them.

For human resources this is a basic requirement. There isn’t much glory in those tasks, but they are essential to achieving good HR management. Often when I audit big companies and ask to see the personnel files of a number of employees I notice that many files are not complete and that important forms and papers are missing. It is important to keep these files complete.

When visiting small and medium companies I am very often told all is well. However, for a reason I insist on seeing the Employee Handbooks because from experience I know that sometimes the unexpected happens. I once read an Employee handbook, which I was assured was ok only to notice Vietnam veterans and other issues mentioned which were not required under Irish law. This was an Irish SME and someone had just copied a US Employee Handbook from the internet and nobody had realised that it didn’t apply to their situation.

Sound HR Administration is a basic deliverable of HR but when it isn’t done right it can cause serious issues for your company and undermines HR. Executives want peace of mind and expect their HR people to get this right from the start.