Why is Human Resource Management Important for Growing Businesses?


The employees working in an organization are considered the pillars that uphold the business and take it to new heights. From manufacturing and quality control to growth and company reputation, employees are responsible for almost every element that a company thrives on for success. Managing human resources, therefore, becomes a crucial component for progress as well as sustainability. Therefore, if you want your business to grow and flourish, you need to start by focusing on your human resource management.
Here are a few reasons why human resource management can serve to be the key to your business growth.

Why is Human Resource Management Important for Growing Businesses

1. Hire Competent Employees

Every business requires employees, but not just any employees. It needs people with suitable qualifications and the right experience, skill-set, and knowledge of the field. Without a proper filtering process, no organization can attract or hire competent resources. Consequently, it could derail the company’s plans for growth and expansion.

The human resource management department utilizes several recruitment practices that effectively filter our qualified and skilled individuals that are ideal for working in the company. Along with keeping the company’s best interest in mind, the department also ensures to control the risks of discrimination and inappropriate questions at a minimum.

2. Provide Relevant Training and Development

Regardless of how experienced or skilled the new hires or existing employees are, there is always room for improvement and growth. And if you want your business to grow, your employees must exhibit a certain degree of professional development. Here the significant role of human resources comes into play. They are responsible for devising strategies and plans for the training and development needs of the employee base.

Many organizations provide on-the-job training and development opportunities to their workforce. Whether through a weekly training session or professional development education programs, all churn out fruitful results. For instance, many organizations allow employees to earn an online masters degree in business administration to learn the ropes of business management. Such online learning platforms enable employees to manage work while also continuing education.

3. Implement Labor Rules

While running a business, regardless of how big or small, compliance with labor laws and regulations is essential. Laws like the Equal Pay Act, Fair Labor Standard Act, etc., are implemented to maintain a healthy work environment. Companies must follow them with diligence and fairness. Violation of these laws can lead to lawsuits and hassles that no business ever wants to encounter.

A human resource department ensures that businesses do not violate these laws. It monitors the staff and management to ensure they adhere to them. Thus, it helps maintain a fair, safe, and healthy workplace while allowing the company and employees to benefit from one another. A cooperative and healthy working environment is conducive to growth and progress.

4. Improve Employee Retention

Businesses that do not have good human resource management in place tend to have high turnover rates. And while this turnover may appear harmless, it isn’t. For every employee that a company loses, about 33% of their salary is spent finding a replacement.

An effective and efficient human resource management department manages employee conflicts to reduce this turnover rate. They perform in-depth analyses of the company employees and policies to identify the cause of turnover. Addressing these causes can allow companies to retain their employees and save ample time and money.

5. Provide Benefits

Employees often find attractive fringe benefits as an incentive to apply for a new job opportunity. The same incentives, when provided by their own company, motivate them to work harder. However, small businesses often think that they cannot offer the benefits that other renowned companies do. While the thought seems logical, it isn’t true. The benefits that a small company offers do not necessarily have to be monetary. Companies can look into their business partnerships and see how they can utilize their services/products to provide employees fringe benefits. For instance, if a company has partnership ties with an automobile company, they give cars to their employees.

6. Conflict Resolution and Employee Satisfaction

For a steady growth and development of a business, the working environment must be conducive to productivity and innovation. Such an environment is only possible when conflicts between the employees are kept minimal, and employees are satisfied. These deceivingly simple aspects can lead to great havoc if not managed effectively. Conflicts can arise, at any time, and anywhere. They are unforeseen events that need effective management to minimize the damage they can cause.

Human resource management ensures to identify and eliminate conflicts between employees immediately. Consequently, they work out practical solutions to keep all the involved parties content and satisfied. It helps increase the employees’ morale and keeps them motivated to perform better.


Employees serve as the fuel that keeps an organization running and flourishing. If left unadministered, they may not perform well and bar the company from continued success. However, a company’s human resource management department ensures that these employees are motivated and engaged at all times. They hire the best talent, monitor conflicts, devise training and development plans, and so forth. Therefore, the secret to a business’s success lies in its human resources’ practical and adequate management.


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