Why Is Human Resources Important To Every Organisation?

Indeed Editorial Team

Updated 5 October 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Human resources or HR manages the employee life cycle. HR professionals handle a wide variety of job responsibilities that are important for an organisation's success. Whether you are an employee or manager, understanding the benefits of HR in a company can help you contact them for workplace issues, concerns and problems. In this article, we discuss what human resources professionals do and list 16 reasons as to why is human resources important to every organisation.

Related: Human Resources Management System: Features And Benefits

What Do Human Resources Professionals Do?

The human resources department of an organisation focuses on improving the satisfaction and engagement level of employees. The goal of HR is to provide a productive and healthy work environment for all employees. As these professionals manage the employee life cycle, they are responsible for recruiting, hiring, training, administering benefits and resolving conflicts.

Since an organisation cannot work without employees, HR ensures employees know all organisational policies, understand their job roles and can access all their benefits. A typical workday of an HR professional may involve creating a job listing, reviewing CVs, shortlisting suitable candidates, meeting with employees to discuss potential conflicts and onboarding new employees.

Related: Human Resource Planning: Meaning, Importance and Key Steps

Why Is Human Resources Important?

Why is human resources important for any organisation, can be explained as this department helps keep employees happy and productive. Here are some functions of HR that show why human resources is important:


By using various online and offline methods, human resources attract and recruit suitable talent for their organisation. They work with managers to develop recruitment goals and shortlist candidates that fulfil this goal. Through shortlisting CVs and conducting the first round of interviews, they shortlist candidates and schedule another interview with a relevant staff member. To find a suitable candidate, many companies interview in different stages. First, the candidate meets HR to discuss the job role. It can help HR provide their opinion on whether the candidate would fit the organisation's culture.

Related: How To List Job Responsibilities in Job Listings


Usually, HR manages all the hiring steps, including making an offer, coordinating salary negotiations and completing the required paperwork. Also, these professionals communicate the job's start date to the new hire and give them details about the rules and regulations followed in the company. The recruiting and hiring process is essential, as hiring the right person can increase operational efficiency, decrease turnover rates and improve business outcomes.

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Onboarding new hires

Upon acceptance of the offer letter by the candidate, HR starts the onboarding process. This could include collecting essential documents, filling out the paperwork, requesting an identity card, including employees in the company's email and notifying managers about the new employee's start date.

Training the new hires

While HR professionals lack the specialised knowledge of a technical role, they are experts in training new hires. By implementing and overseeing best training practices, these professionals ensure a smooth transition of new employees. They may provide training on the organisation's policies, workplace harassment and ethics. HR can even organise employee-specific training. Though new hires can learn directly from their team members, HR professionals may provide learning material to guide them.

Related: On-the-Job Training for Efficient Staff Development

Managing payroll

Often, human resources oversee the entire payroll of an organisation. They can help companies decide on the salary of new hires and ensure every employee receives their salary on time. For processing the correct salary, HR professionals use technology to record the work hours of all employees. For example, to determine if irregularities in attendance could affect the pay, HR may use the card-based system or fingerprint scanner to track attendance. They may ask employees to fill weekly timesheets and the number of hours worked each day to track their attendance

Managing benefits

HR professionals implement the state and central government requirements that identifies the benefits every organisation offers employees. While adhering to statutory requirements is essential, often HR provides more benefits to attract and keep top-performing employees. Human resources also manage sick leaves, casual leaves, paid time off (PTO) and other benefits.

Related: What Is An Employee Management System? (With Benefits)

Ensuring employee wellbeing

Ensuring employee wellbeing is an important reason for an organisation to have an HR department. Physically and mentally fit employees are typically more productive and efficient at the workplace. HR can ensure this by using a comprehensive employee wellbeing program. With employee wellbeing relating to the quality of the work environment, human resources facilitate various initiatives and opportunities to create a healthy work environment. For instance, human resources may provide comfortable office chairs for employees or offer healthy snacks throughout the day.

Related: What Is Social Responsibility and Why Is It Important?

Resolving conflicts

Conflicts happen in every workplace. Sometimes, two or more colleagues may have a professional disagreement, which requires mediation. Other times, it could be a conflict between a manager and employee. Workplace conflicts require an amicable solution after understanding the specifics of a situation. This helps in developing unbiased and practical solutions to a conflict. But, depending on the seriousness of the conflict, it may require an expert to resolve a conflict.

For example, when an employee feels a colleague remains distracted and unproductive at work, they might feel comfortable discussing the issue first with HR. The HR professional meets with the employee's manager to understand work expectations and clarify the misunderstanding between all parties while enforcing a culture of shared responsibility.

Maintaining compliance

Human resources ensure organisations comply with the state and central government laws. This can include completing paperwork to verify the employee's eligibility to work in the country. They also ensure their company offers all benefits as per the labour law of the state in which they work. Part of this process also requires HR to be aware of government regulations related to this field.

Improving employee performance

Human resources develop the performance management system of an organisation. Using this system, HR keeps track of employees who constantly fall below the organisation's expectations. To ensure employees contribute to their potential, HR may provide employees with on-the-job training and motivate them to excel at their work.

Helping in career and succession planning

Apart from helping organisations succeed, human resources focus on helping employees move forward in their careers. The HR team conducts activities that help employees in career and succession planning. When an organisation has vacant positions, the HR professional works with managers to identify top talents suitable for that position. Apart from considering the work performance, HR may evaluate candidates on skill and reputation the candidate enjoys with their current team member, ensuring that human resources hire a skilled and qualified candidate.

Related: Why Employee Motivation Is Important: A Complete Guide

Analysing the job roles

HR fills all vacant positions in an organisation. So, these professionals assess and analyse each job and develop the title, job description, responsibilities, qualifications and skills required for a vacant position. Also, to determine the compensation and benefits of a particular vacant position, HR professionals evaluate a position to determine its value to the organisation.

Ensuring budget control

HR professionals develop methods to reduce the cost associated with workforce management. This could include negotiating discounted rates for company-wide health insurance or using online recruitment methods to reduce the usage of stationery and utilities. In addition, these professionals study and analyse employment trends and salaries of different job functions to ensure that their company offers a competitive yet realistic salary to employees.

Maintaining discipline

When employees perform activities that do not align with a company's core values and principles, HR often intervenes to address the situation. When employees engage in inappropriate behaviour, the organisation often turns to HR for guidance. HR professionals use their skill set and expert judgement to determine the disciplinary action against such employees. Before enforcing the disciplinary action, HR takes into consideration the employee's history with the organisation. For example, a top-performing employee who does good work suddenly starts taking long breaks during office hours, making the human resources have a conversation with the employee.

Increasing employee engagement

In every organisation, human resources create a workplace environment that fosters a culture of engagement. It coordinates activities and encourages the participation of all employees in events or contests they organise. Also, they create different engagement methods, like referral programs, to enhance the hiring efforts and provide monetary rewards for employees who refer candidates. They are also responsible for creating a monthly or quarterly newsletter that keeps employees informed about the company's events and news.

Performing administrative duties

Another reason human resources are important for a business is that they perform various administrative duties. Duties like maintaining employee records, files, insurance policies, employee contracts and keeping track of employees leave help in the proper functioning of a business. Part of this process requires HR to process business-related expenses and manage travel arrangements for employees. For example, recently terminated employees may claim that the company fired them inappropriately. But, if HR has all documents negating the employee's claims, they can protect the company from legal troubles.

Related: 10 Careers In Human Resources (With Salary And Job Duties)

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