The Changing Role of Human Resources and How It Now Impacts Your Bottom Line More Than Ever

Twenty years ago, the typical company human resources department was almost exclusively an internally focused operation. They were the folks who processed payroll, recruited and hired new employees, and handled various administrative tasks, such as time tracking and attendance. And while those critical functions continue, an evolved, more modernized HR function is emerging, one that operates as a critical business asset that can directly influence company success or failure.

But how precisely can HR help your business run better? Here are just a few of the many ways:

Right Sizing Your Organization

One of HR's most critical contributions is ensuring your organization is properly staffed with the right people in the right roles at the right time. A well-resourced HR department employs workforce analytics paired with predictive modeling to anticipate future staffing needs, prevent overstaffing, and identify skill gaps before they negatively impact productivity. These resources – often available through a well-matched Professional Employer Organization partner can save businesses unnecessary labor costs while ensuring optimal performance levels.

Investing in People

Human resource’s role in developing comprehensive training and career advancement programs directly impacts retention and productivity levels. When employees can easily identify growth pathways, turnover often decreases significantly, greatly boosting the chances of retaining valuable talent.

Managing Your Most Important Asset

People represent the most significant expense for most organizations. But they're also the greatest asset when well-managed. HR's evolution into a more data-driven function allows companies to better measure and optimize work teams via employee engagement surveys, performance analytics, and retention metrics.

Modern HR departments are also able to track key performance indicators that directly correlate with desired business outcomes. This data-driven approach transforms HR from a business cost into a business driver.

The AI shift in HR

AI-powered tools are both modernizing and streamlining the recruitment process, reducing time-to-hire metrics, and improving candidate matches. Predictive analytics help identify flight risks among high-performing employees, allowing for proactive retention efforts. Technology accelerates the shift to HR professionals that focus on strategic initiatives while routine HR processes are handled more efficiently.

Insightful organizations that correctly identify HR as a strategic business partner rather than a support function will have a significant competitive advantage. The return on investment for elevating HR's role comes in the form of improved operational efficiency, enhanced employee performance, and better strategic decision-making.

In today's competitive business environment, a sound people strategy is also a powerful business strategy, and HR serves as the foundation for both. For small and medium-sized businesses, the right PEO partner can open the door to many of these increasingly beneficial functions. 

Looking for an HR partner?

At BestFit, we can help you find the right solution for your business needs.