Setting Up Your Human Resources Department for Growth and ROI

Human Resources department

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A human resources department is an important part of any organization no matter how small or big. Unfortunately, many businesses overlook bigger-picture potential for human resource departments to increase the productivity and viability of the enterprise. In those cases, decision makers tend to view human resources as a drain on resources rather than appreciating the way in which a well-executed human relations strategy can bolster the bottom line.

Ensuring Success: Setting Up a Human Resources Department

Human Resources department

While developing a human resource department may be a costly endeavor, larger companies would be short-sighted to avoid hiring the most qualified individuals available and smaller companies have the ability to outsource human resources responsibilities to maximize the expertise they get in exchange for their dollars.

Functions of human resources departments

To truly appreciate the potential for your human resources department, you must first understand all of the functions that fall under the HR umbrella. The main functions of a human resources department are staffing, employee compensation, employee benefits, designing job descriptions and responsibilities, and perhaps most importantly, increasing the productivity of a business through empowering and optimizing employees.

Human resources to mitigate risks

In this day and age, it seems like you cannot scroll through your Facebook feed or turn on the local news without hearing about yet another company facing an expensive lawsuit because of sexual harassment, discrimination or some other unfortunate situation. These types of lawsuits are easily avoided when an HR department is led by knowledgeable experts who are passionate about ensuring companies operate appropriately. This means implementing trainings and policies that actually work at preventing impropriety.

Human Resources department


That is to say, simply having policies in place is of virtually no benefit if they are not effective policies. When was the last time you reviewed your company’s sexual harassment policy? Does it cover all of the necessary bases? Do your employees follow it? If not, it is time to evaluate whether your human resources efforts.

Human resources department to drive growth

While many companies (and HR managers, for that matter) are happy with the human resources department doing the bare minimum to check all of the requisite boxes and keep the company technically running from an HR standpoint, ensuring compliance and calling it a day. But in highly successful organizations, effective HR departments are instead driven to add even more value to their organizations.

By the very nature of their work, HR departments are in a position to collect and analyze a wealth of data to provide great insights. The nature of that data and how it is applied will be dependent on the specific business and how workers contribute to its profitability. A highly functioning human resources department will be able to optimize virtually all aspects of a given business and offer valuable strategic guidance.

How to measure return on investment in a human resource department

There are a few key variables that are very easy to measure indicators of a human resource department’s success. Let’s examine which analytics most companies should focus on to determine whether or not they are getting the most benefit from the HR department.

Employee retention is a huge measurable variable because it is costly to hire new employees and train them to perform to their full capacity. Effective, satisfied employees within the company will save massive amounts of money over the years. It is the job of the human resource department to minimize the cost of turnover.


On the other hand, analyzing the productivity of employees and identifying patterns is helpful in making decisions about what the company can do to keep the highest performing talent (and where cuts make the most financial sense when necessary). Perhaps there is a cycle to employee productivity and staffing levels should vary throughout the year. A good human resources department will let you know with certainty where your best human capital resides.

Tracking and measuring the benefits that employees sign up for can also provide a plethora of insights. For instance, employees that plan on being devoted to the company for a long period of time are more likely to sign up for more benefits. If no one in the company is signing up for benefits, it could be a sign that your team lacks longevity or that you should reevaluate your benefits package to ensure it provide value to good existing team members and will help you attract the best talent in the future.

If your company using human resources to its full capacity? If not, you may be leaving money on the table. Call us today to discuss what your HR efforts look like right now and where there might be room for improvement. Business owners are consistently amazed at the financial improvements they see when making the right investments in HR. Let’s chat about your business and how exactly our human resources services can help your company become more profitable.

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