Every business owner and employee is familiar with HR, but chances are, your company isn't using these services to your best advantage. While everyone knows HR professionals handle recruiting, hiring and training, there are a slew of other integral operations that HR can help with.
It may be common practice to treat HR as an important but separate department from the rest of the company. However, new data indicates that this approach may actually be costing businesses money. If you want to maximize revenue and efficiency, HR solutions are a key part of that goal.
HR's financial impact
There's more to a business' financial success than just selling products and services. Many factors, both internal and external, can affect revenue, and as it turns out, HR services play a big role in managing these factors. According to Human Resource Executive Online, a recent report analyzed a series of studies from the past few decades to determine what the relationship is between HR and a company's success. The source noted that 67 of the companies surveyed reported a positive correlation between using HR services and the financial success of the business. An additional 17 companies demonstrated mixed results, while only one company showed a negative link between HR and revenue.
How can small businesses benefit?
Small-business owners often need every advantage they can get when it comes to helping their companies get ahead. With this information regarding the usefulness of HR services, entrepreneurs have a new resource to turn to.
"Companies that have invested a lot of time and effort on their HR policies should realize that this is a competitive advantage," study author Aaron Bernstein said.
The specific ways business owners can benefit from are myriad. HR can offer more effective recruiting, more efficient hiring and even more organized payroll and tax administration. In addition to these direct value-adding measures, HR professionals can also help by keeping company operations up to date with various legal and industry compliance standards, such as the changes introduced by President Obama's health care law in 2010.
Some small-business owners may worry about the financial implications of turning to HR for better company performance. Fortunately, PEO companies make it possible to access these advantages without having to support an in-house department on your organization's payroll. Studies like the one from Bernstein demonstrate that the HR industry is likely to see a growing significance in business operations in the years to come.