All large and successful businesses own a Human Resource department and this pretty much sums up its importance. When we think of HR, our minds go towards hiring, training and payroll/benefits administration of the firm’s employees. While these are undoubtedly the major roles HR department plays in a business, one major operation is not being carried out by HR departments of most businesses globally: Planning business strategy for future success and efficiency.
While it may be argued that this responsibility should be taken care of by business managers and other decision making employees, but there are reasons behind why HR departments can develop a more effective strategy for business development:
• Understanding of the demand and supply in labor market: When a business development strategy is designed, labor factor is often ignored. This means that the strategy will not consider the labor market conditions and will be planned on mere assumptions. On a better side, if HR department plans business strategy, they will plan the development techniques looking closely at the possibility of hiring and firing workers since they know the labor market conditions very well.
• Recognizing the abilities of potential employees: HR department will recruit new employees and train the existing ones according to the strategy they plan. When HR department is given a business development strategy designed by other decision-making employees, it is difficult for them to choose employees accordingly. Imagine a business development strategy given to HR to work on requiring ten actuaries. Now the strategy is highly inefficient if we assume that only two actuaries are willing to work at this time from among the entire workforce. This can be prevented if the business development strategy is planned by HR department itself.
• Offering perks and incentives to useful employees: According to the CEO of cloud ERP Jeremy Roche, a business can be even more successful if it is able to attract and retain the useful employees. Keeping in mind the competitors you may have, it is not always possible to get the best minds. However, HR managers and planners designs the strategy in a way that they are able to offer perks and benefits to employees they believe will help them implement the strategy successfully. They will allocate an appropriate percentage of budgets on everything carefully in order to yield the best result.
• HR is strategic, not service: HR department was first considered as a service department where only employee hiring, training and administration was done. Now this department is considered as more strategic that manages cost, performance, outsourcing and succession planning. That said, there is no question of why HR department cannot design a successful business development strategy.
All the above mentioned points provide clear evidences of why businesses must undergo changes and let HR department shoulder this responsibility of designing business development strategy. If only a few businesses implement these changes, their success will eventually tempt competitors to do the same and hence most businesses globally will improve resulting in more productivity, employment and profits.
Alison Carmel is an MA in English literature and philosophy and shows great interest in business and entrepreneurship. She often helps the ‘Do My Essay For Me’ type students and individuals in writing.