PAYDAY Workforce Solutions Blog

The Three Ways HR Makes Employment More Profitable

On Aug 1, 2019

HR covers a lot of territory—much of it cluttered with
paperwork—but it really does have a precise business purpose. The point of HR
is to make employment more profitable. HR does this in three fundamental ways.
First, HR protects the organization against employment-related lawsuits and
fines. Second, it reduces the costs of employment. And third, it maximizes
employee productivity. In short, HR helps the employer save money and make
money in all things related to employment.

Protection from Lawsuits and Fines

Nothing can prevent an employer from being sued, but good HR
can substantially reduce the risk of lawsuits and other costly consequences of
non-compliance by ensuring that the organization follows federal, state, and
municipal legal requirements. 

The government has multiple agencies tasked with
investigating violations and administering fines. The Equal Employment
Opportunity Commission investigates discrimination claims. The Occupational
Safety and Health Administration looks into workplace hazards and safety
violations. The IRS and Department of Labor may ask to see your books. And the
U.S. Citizenship and Immigration Services might audit your I-9s. 

The penalties for violations can range from amounts that are
mildly inconvenient to those that are financially devastating, so you don’t
want to leave these areas to chance or hope you stay under the radar. Employing
people comes with risk, and it’s an HR job to manage and reduce that risk.

Reduction of Employment Costs

Competitive wages and benefits, office perks, and first-rate
technology can help you find and keep great workers, and they can help you
improve your products, boost your sales, and grow the business. But there are
also employment costs HR can help cut. Hiring and recruitment processes can be
streamlined and assessed for inefficiencies. Turnover costs can be reduced by
improving your onboarding process, communications, and engagement efforts.
Inefficiencies can be resolved through performance management and discipline.
And offering some form of Paid Time Off can enable sick employees to stay home
and rest so they don’t come to work sick, spread their germs, and reduce the
productivity of the office even more than if they’d stayed home.

Increased Employee Productivity 

In addition to preventing and reducing costs related to
employment, HR can also help the organization increase its revenue by
encouraging and helping employees to be more collaborative, innovative,
creative, knowledgeable, skilled, and just plain better at their jobs.
Coaching, training, skill development, career advancement, outside education,
and culture advancements are tried-and-true productivity-building methods. They
also have the added perk of directly benefiting your employees. 

When HR works on maximizing productivity, it’s able to serve
the interests of both the employer and employees in ways that are visible and
appreciated by all parties. Employers bring in more revenue, employees develop
professionally, and customers get better service. Everybody’s happy.

Good for Business

The business case is the case for HR. Ignoring HR or
neglecting its responsibilities puts the organization at greater risk, wastes
money on subpar and inefficient operations, and hinders employers and employees
from reaching their full potential. Investing in HR reduces risk, eliminates
inefficiencies, and improves productivity. Whether you’re a business owner,
office manager, HR department of one, or on a team of HR practitioners,
spending time on HR bolsters everyone’s success. 

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