Daniel Martín
By Daniel Martín on September 05, 2022

12 reasons why HR is important for business success

Companies usually forget what HR does, as it’s mostly behind-the-scenes work. The purpose of the HR department is more than just processing payroll and setting employee health benefits. CHRO plays an essential role in developing a company’s strategy and providing a well-rounded experience for employees.

What are the common HR functions that enhance employees’ perception, no matter how different their vision, values and vibe? Let’s take a look so that you can start channeling it for your company.

1. Training and development.

It’s widely recognised that employee development contributes to tracking any gap in the company (including managers or CEOs). Employee development breaks the status quo. That's why training and development management are a big part of HR.

It is important to ensure that all employees have the skills necessary to meet job needs, and achieve the organisation's objectives. One important responsibility of the HR department is the development of employee performance. New companies or businesses in the early stage may especially benefit from identifying training needs for existing employees. 

Although, this strategy may also make leaders, with expertise in HR strategic management, participate in corporate decision-making, and could HR decide if these objectives match the organisation's culture.

2. People management. Deal with day-to-day people management. 

Not all leaders have the time and the skills to manage the entire workforce. There’s a risk they get bogged down in personnel issues such as managing holidays, absences, time tracking or other day-to-day basis tasks. 

HR is dedicated to improving the company's bottom line with its knowledge of how human capital affects organizational success. 

3. Benefits and Compensation

HR compensation specialists develop realistic compensation structures that set company wages competitive with other businesses in the same industry (or companies competing for employees with similar skills), which can help attract and retain talented employees. Break the stigma around money by talking with your own employees. 

HR conducts wage and salary surveys to maintain compensation costs aligned with the organisation's financial status and projected revenue. They even incorporate purpose-driven metrics into compensation and performance decisions and link employee compensation to performance against some set goals. 


HR works to create a workplace culture that encourages employees to do their best and to stay around for years to come. They need encouraged, supported, satisfied, and motivated employees. When employees don’t feel supported, or work long hours, their motivation to perform is impacted and have more chances to leave the company in the early stages. 

Connect with their values and what they think is important to your organisation. This will be crucial to start a revolution from the ground up.

5. Help business fill a crucial role with the right person.

The HR team is responsible for recruiting qualified candidates and filling up positions with top talent new employees. They don't have to deal only with the existing employees, but with possible new ones.  

They are looking for the best people which will benefit the company more in the long run. Retention allows the company to keep moving forward, saving both time and money. If HR plans the recruitment and selection process well, there will be cost savings from expenses spent on training and onboarding new employees. 

HR determines the most effective methods for recruiting applicants, including determining which ATS is best suited for the organisation's needs. HR underpins the brand’s growth strategy

6. Safety. 

Workplace safety specialists also engage employees in promoting awareness and safety, but Federal and state laws governing employment and employee safety can be complex. HR professionals have a full understanding of employment law and the regulatory requirements of a business associated with staff. They make sure to keep the company in compliance, both to avoid fees and penalties and to create a workplace environment where everyone can feel safe and valued. 

Employers have an obligation to provide safe working conditions and save businesses some money along the way

7. Boost Employer branding. 

People, culture and business success go hand-in-hand. 

Reputation as an employer helps attract talent and also impacts customers. Corporate branding means promoting the company as a choice. Human resource managers usually look at the recruitment and selection process, as well as compensation and benefits to find ways to appeal to highly qualified applicants.

Take a look at Uber for its own crisis. The resulting bad publicity and plagued sexual harassment cases have undoubtedly deterred many from working there.  

8. Business communications.

Daily duties for an HR manager who specializes in employee relations may include facilitating communication between leadership and employees. Digital technologies, such as HR software, can offer new channels for communication. 

The HR department is responsible for fostering a good work environment. Communication is a two-way process that involves top-down dissemination of HR plans and bottom-up questions from employees. 

9. Conflict resolution and better work climate.

HR can identify, investigate and resolve workplace issues that help minimize gossip and misunderstandings, and help employees trust each other better

Conflict Management happens everywhere and is inevitable, but we should avoid it. Disputes among employees, or between a business owner and an employee usually stem from similar sources 

They have to address employee complaints and encourage open communication in the workplace, providing a channel for employees to express their concerns anonymously, and provide constructive suggestions to improve the working environment. 

Employer branding and motivation were key tactics used for marketing-software company Hub-spot . 

HubSpot open-door policy lets employees speak up about different topics related to them and their concerns. This has also led to a better work environment.

10. Create the best employee experience possible. 

A Gartner survey revealed that only 13% of employees are fully satisfied with their experience. Organizations are making significant investments in efforts to improve employee experience, such as onboarding investments, workplace redesign, or managing the moments that matter to employees. 

Similarly, HR leaders can build internal partnerships to improve the Employee Experience or take advantage of digitalization to improve it.

11. Building and maintaining company culture

Employee engagement, job satisfaction and staff retention stemmed from positive business culture. 

HR plays a vital role in making the company lives its purpose and values. CHRO can articulate desired individual mindsets and behaviors linked to purpose by identifying “moments that matter” in the company’s culture. 

To strengthen an organisation’s identity, HR should ask the following questions:

  • How can we develop a sense of purpose that has an impact on our ways of working?
  • How can we identify key talent roles and focus them on creating value for the rest of employees? 
  • How can we build a data-driven company to understand our organisational health?
  • How can leaders role-model the behavior changes they were asking their employees to make?

PFIZER Spain focuses on their employees to spread different purposed messages. We are talking about “Sustainable Development Goals Week”, a campaign that aimed to raise awareness and train employees on the implementation of Sustainable Development Goals. 

12. Support managers

Of course, not all the tasks described above could be accomplished by HR alone. This need to be undertaken with managers and leaders. Pair working is useful because your organisation works more effectively, which results in more trust and better working relationships all round. 

HR can help support managers to become skilled at developing other employees and addressing employee underperformance that can become harmful to a business

People management is a key aspect of any organisation — from improving employee well-being and risk management to attracting and retaining key  employees. Without proper HR management, the company  would lack the structure to evolve over time. Having strong leadership backed by the HR department is one of the best ways for a company to ensure employee satisfaction, performance, and future growth. 

A satisfied staff is the foundation of a thriving company, and this is why every company needs a business manager to lead this area. When a business is aiming for growth, a long-term people project must be part of the strategy. HR Management can glue each area of the organisation together.