The function of HR is costing you millions if it’s not done right. 

Too often, companies view Human Resources as simply a place for paperwork and payroll. 

Instead of seeing HR as a department for paperwork and payroll, consider that its strategic value is far more significant than most companies realize. When businesses fail to fully utilize this function, it can lead to a disastrously high turnover rate. If your company is losing talent and money, the problem might not be with your people but with a fundamental misunderstanding of the HR role. 

This is a multimillion-dollar mistake no one should tolerate.

So is there any good that comes from a properly functioning HR?

Yes!

When it’s in check!

It’s called: Strategic Human Resources

It’s a function that goes beyond administrative tasks to become a true business partner, directly impacting the bottom line. HR that is in check can prevent a high turn over rate, improve productivity, and create a culture of excellence. It’s the silent force that keeps your business competitive and your people happy.

The 5 Major Roles of HR that Can Turn Your Business Around

These items have the highest impact and are the easiest to implement.

1. Recruitment and Talent Management

Recruitment is the gateway to your company’s future. It’s not just about filling a vacancy; it’s about strategically finding the right people who are the perfect fit for your work culture. When HR operates effectively, it acts as the primary defense against hiring errors that lead to a high employee turnover. A flawed recruitment process is the number one cause of a high employee turnover, and it’s a problem that should be treated as an expensive, continuing mistake.

The goal here is proactive talent management. This involves identifying the skills you need for future growth and building a robust pipeline of candidates before you even have an open position. It’s about moving beyond simply posting a job ad and waiting for responses. It means HR is using advanced methods to not only attract but also retain top performers, ensuring a stable and productive workforce. This is a “must-do” for any company that wants to succeed in a competitive market.

2. Performance Management

This is where HR becomes a true business partner. Performance management is no longer a dreaded annual review; it’s a continuous process of coaching, feedback, and goal-setting. HR’s role is to ensure that employees are aligned with company objectives and have the resources to succeed. This isn’t just about accountability; it’s about unlocking the full potential of every employee.

When a company’s performance management system is flawed, employees become disengaged. They don’t know what’s expected of them, and they feel their hard work goes unnoticed. This lack of direction leads to low morale and, inevitably, a higher turn over rate. By establishing clear goals, providing regular feedback, and celebrating achievements, HR can foster an environment where employees are motivated and productive.

3. Employee Relations

The heart of any successful company is its people. Employee relations focuses on fostering a positive and healthy work culture. This includes resolving conflicts, ensuring fair treatment, and creating an environment where employees feel heard and respected. A toxic work culture and a lack of proper employee relations are major reasons why a company’s turn over rate skyrockets.

HR must serve as a neutral party to address grievances and mediate disputes. When employees trust that their concerns will be heard and addressed, they are more likely to stay with the company. This also helps build a strong sense of community and loyalty, which are critical for long-term success.

4. Training and Development

A company that doesn’t invest in its people is a company in decline. Training and development is HR’s role in equipping employees with the skills they need to grow and adapt. This investment not only boosts morale and loyalty but also creates a more agile and competitive workforce. It’s a proactive measure against a high turn over rate and a clear signal that the company values its people.

A proper HR function ensures that employees have access to the right tools and knowledge to do their jobs effectively. This might include skills-based training, leadership development, or even mentorship programs. When employees feel that their company is invested in their growth, they are significantly more likely to stay, reducing the costly impacts of a high employee turnover.

5. Compensation and Benefits

This is the practical side of HR, but it’s no less strategic. Compensation and benefits are a direct reflection of how a company values its employees. A fair and competitive package is essential for attracting and retaining top talent. HR must continuously analyze market trends to ensure that their offerings are aligned with industry standards, preventing a high employee turnover due to pay dissatisfaction.

It’s not just about salary; it’s about the total compensation package. This includes health insurance, retirement plans, paid time off, and other perks. When a company’s compensation and benefits package is uncompetitive, it signals to employees that they are not a priority. This is an open invitation for your best people to look for better opportunities with your competitors.

Conclusion

It’s clear that the role of HR is more than just administrative. It’s a strategic function that directly impacts your company’s performance. The HR department’s effectiveness reflects the company’s efficiency and directly impacts their decision to stay or leave. Unfortunately, some  pay much attention to their HR function and some do not. And when there is lack of attention, it will serve as the most expensive “hidden hiring problem” that must be immediately addressed.