Why HR should be the most important department in every company?

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This article was first posted on LinkedIn.

There are many departments in every company and every manager thinks that his or hers is the most important, that without it the company would not work. In nearly every company the HR department has just minor importance or nearly none. But why is that so?

Costs, Costs, Costs

Many companies see the Human Resources department as a cost factor that doesn’t bring much value. HR departments don’t interact with customers and don’t generate any profit. That is why it generally receives one of the smallest budgets and less and less people to do the jobs at hand.

This fact has evolved over the years, especially in Germany. If you are looking at big companies, you can nearly find no HR jobs that are posted on job walls. Existing jobs are cut, fewer job cards are given to the HR departments.

Less people, same work

And this is where the problem starts. You have fewer people to do the same job. You would think that the jobs that are cut down would be obsolete these days, that there are systems in place that assist the remaining employees to do the job. That is not always the case. Germany tends to have missed the digital transformation.

HR departments have to do the same job as 10 years ago, only with fewer employees and less budget. It is a vicious circle. Digitalizing processes cost money, everyone is aware of that, but with a budget that only allows to kind of keep the daily business running there is no money left to invest in digitalization.

Still, the top management of the companies expects HR to exceed results from the year before, and do an even better job. This only results in overhears of the remaining staff, a stressful environment and more and more candidate experience that is not worth calling it decent Human Resources.

Why should this approach be reconsidered?

Indeed, the HR department does not have any direct contact with customers and they do not generate any revenue for the company. I can understand this point of view of management. But if you think a bit longer you get to the point that all the people who have this contact and make money for the company got or will get hired by people from the HR department.

In this case, HR has an indirect, but very important role to play for the entire company. If they bring the wrong people, the company will fail in the short or long term. If employees don’t feel appreciated and if they cannot talk to anyone in the HR department because HR managers don’t have time, then the employees will leave for another company eventually.

If there are no decent learning paths within the company that employees can use to develop themselves to evolve and target a better position in the company, the same faith again, they will leave.

Employer branding shows a nice environment, that people are the most important resource for the company. But the moment somebody applies, they cannot be treated the way they should be because of the situation at hand. I could go on and on bringing more examples.

It is called HUMAN Resources!

The word Human should be written in capital letters. A company rises or falls with the wrong people. Having a great, well-financed HR department with people that have the time and the resources to do an excellent job, to reach out to future employees or be there for existing employees, showing the PEOPLE that they are important, this should be the targeted goal of every company out there.

Small companies show how it should be

Some companies have already reacted to this situation, they show that it can also be done differently. Especially Start-ups, where people are the key factor to success. These companies do everything to get the best candidates, develop them and retain them.

They noticed that all of these things cannot be done without a good human resource department. There the HR teams are proportionally way bigger than in big corporations They do not live from their brand to attract or retain people. And this is good, they interact with employees and candidates, show them their value for the entire company. Top management of every company should rethink their approach and see that the Human Resources departments are not only a cost factor on their balance sheets but the most important department. If they deliver bad candidates or cannot interact with employees, the company will face consequences in the future, and Management should be aware of that.