Strategic Importance of Human Resource Management in Today’s Businesses

Current and future challenges faced by today’s businesses point to the need for better management of human resources if continued growth is needed. These challenges could be economical (e.g., recession), technological (e.g., computerization), political (e.g., new government policies), social (e.g., concern for our environment), demographic (e.g., changing composition of our workforce), legal (e.g., changes in minimum wage laws), cultural (e.g., ethnic diversity), or otherwise in nature.

For example, as an economic argument, today, Canadian business faces three critical economic challenges: survival during a recessionary cycle, meeting the global trade challenge and the challenge of productivity improvement. All Canadian businesses, will be coping for a while with the current recessionary cycle, and smaller Canadian organizations cannot ignore the many implications of international trade.

In addition, the need for increased productivity forces our businesses for creating a human resources department, as in a business environment, productivity improvement is essential for long-run success. Through gains in productivity, managers can reduce costs, save scarce resources, and enhance profits. In turn, improved profits allow an organization to provide better pay, benefits, and working conditions. The result can be a higher quality of work life for employees, who are more likely to be motivated toward further improvements in productivity. Human resource managers contribute to improved productivity directly by finding better, more efficient ways to meet organizations’ objectives and indirectly by improving the quality of work life for employees.

A strategic human resources department adds value to the company's existing and future strategic plans. Improving the contribution of human resources is so ambitious and important that all organizations must create specialized human resource departments to enhance the contributions of people.  It is ambitious because human resource departments do not control many of the factors that shape the employee's contribution, such as capital, materials, and technology. The department decides neither strategy nor the supervisor's treatment of employees, although it strongly influences both. Nevertheless, the role of human resource management is critical to the success; indeed, even the very survival of the organization. Without a motivated and skilled workforce, and devoid of gains in employee productivity, organizations eventually stagnate and fail.

Services could be offered by human resources professionals that aren't already looked after by supervisors or managers at various organizations are:

Outlining these job responsibilities will free up time for Line Managers to carry out their functional roles more effectively. It also illustrates how the HR function adds value to the organization as both a support role, and through proactive actions such as conducting employee surveys to assess satisfaction with organizational policies. Such proactive strategies on the part of HR help fend off expensive problems the organization might otherwise encounter. 

What would you measure to determine whether the HR department was doing an effective job for the company?