Business Growth and Profitability through Human Resources

Most argue that human resource staff is supposed to be at the executive table doing all the firm’s hiring and strategic planning since they are immersed in the firm’s business and financials. Perhaps such is how human resource management can lead to profitability.

Hence, the primitive notion that human resource is just a mere appellation for processing documents has widened up people’s knowledge that HR Management contributes to the company’s culture and business development big time.

Human resource management plays a crucial role in an established organization than what people think. This department can improve a company bottom line and increase profitability in several ways and among them are:

  1. *Strict Hiring Process *

One of the infamous ways of how human resource management can lead to profitability is through the employment process. While they’re saddled with this responsibility, their ability to hire a new employee based on merit will help the organization’s culture.

All too often, when the right employees are adequately trained and equipped with the tools, they will be eager to perform their jobs efficiently and effectively and become more productive.

In the same vein, since human resource management plays a crucial role in the employee’s onboarding process, they will take all the measures to make sure that recruits are fully ready to perform their task at the maximum level possible.

  1. Reduced Turnover

If used effectively, human resource management can have an excellent impact on an organization’s profitability since they hire the best candidates who have all the needed skills for the job.

As a result, they are likely to employ individuals who are enthusiastic about their career and genuinely ready to increase job satisfaction, thus reducing the firm’s turnover.

Also, reducing turnover is very important because of the hectic nature of replacing staff. But with human resource management, getting the wrong employee off the bus in the first place will be lots easier.

According to a study carried out by the [Center for American Progress](https://www.americanprogress.org/issues/economy/reports/2012/11/16/44464/there-are-significant-business-costs-to-replacing-employees/). The average cost of an established business enterprise spent to replace an employee is around 16% of their annual salary. Huge, isn’t it?

  1. Maintenance of Balance Workforce

You must recognize all the ways in how human resource management can lead to profitability or how it could contribute to the growth and development of your business.

When HR functions are effectively carried out, it can be the catalyst that speeds up your long-term growth hence, lead to profitability.

Human resource management can maintain a balanced workforce using sufficient and employees to fill all areas while minimizing the cost overruns in the company’s payroll.

The ability of human resource management to select, maintain and keep the right employees to do their work to the best of their knowledge makes the department great and useful and this is exactly where the actual profit gains lie.

Conclusion

Human resource management aims to maximize business organization productivity by optimizing the workforce of its employees. This mandate is real and unlikely to change despite the pace of change in the business world.