Human resources, or HR, is a department and discipline often subject to misunderstanding and underestimation. A functioning HR department is far more than a magnet for employee complaints and feedback and can in fact be a vitally important part of a growing business – even if internal investment does not feel like the wisest action for a new and growth-oriented venture.
HR is a broad church, but one that covers the proper management of staff within a business from onboarding to off-ramping and everywhere in between. HR teams manage recruitment and staff logistics, from onboarding to legal compliance and beyond. As a new business, you might not have the budget for a permanent department. You may decide to reach out to a qualified team instead to outsource your HR needs – but why should you do so in the first place?
Access to Specialist Skillsets
People management is a skill in and of itself, and not one that every entrepreneur possesses. While you might have the knowledge and vision to progress a company within a specific industry or niche, you may not have the equivalent knowledge to properly manage your team beneath you.
HR is a useful tool for delegating this management, ensuring you get the best out of your staff and can retain focus on your wider business goals. This is also true with regard to some of the more quotidian tasks relating to staff management; payroll enrolment and legal compliance are vital things to actively engage with as a business but can be time-consuming and ultimately limiting for a business without a dedicated HR department.
Talent Acquisition
HR departments are also incredibly useful for offsetting other personnel-related tasks too – such as hiring. While you will still want to retain some form of say in the staff makeup of your growing business, you can hand it off to HR and enjoy a robust hiring system without having to promise time and energy to it.
Your HR department will be uniquely placed to attract and onboard the best possible candidates for a position, on account of having the time and budget to properly advertise positions and comprehensively interview for them.
Employee Retention
Further to the acquisition of talented employees, HR can also be indispensable with regard to retaining your talent in the long term. Staff retention is a key issue that is often overlooked by new and growth-oriented businesses, but it can have extreme consequences for their viability.
Staff turnover, or ‘churn’, is a costly variable; too much staff churn not only directly wicks away cash in the form of training costs and job advertisements but also stymies growth. The time it takes to replace a talented individual with another, whether new to the field or skilled but unfamiliar with your processes, correlates directly with your ability to grow and expand. Simply put, the lower your staff turnover, the more effective your growth strategy.
HR is an essential piece of the puzzle when it comes to staff retention. Having a team in place to directly handle the onboarding process, and to ensure that new starters get the training and treatment they deserve, will naturally improve turnover statistics. HR can also speak from an area of expertise on matters of pay and perks, to provide a high-value package to new customers.