Why Is Human Resources Important? What You Need to Know and Tips for HR Management

Human resources (HR) is the backbone of a thriving organization. Yet, according to BambooHR research, 26% of enterprise organizations don’t include HR in C-level leadership, leaving it out of strategic decision-making. That oversight can be costly.

When done right, HR isn’t just a business function—it’s a business driver. Strategic HR helps organizations attract and retain top talent, nurture a healthy workplace culture, and improve performance across the board.

But when HR efforts fall short, the consequences ripple across the organization: high turnover, compliance risk, poor employee engagement, stalled growth. In this article, we break down why HR matters and how to do it right.

Why is human resources management important?

Every organization is different, but the fundamentals of HR are the same. If you’re wondering why human resources management is important, here are a few ways HR management drives success.

Tracking applicants and hiring strategically

Hiring takes time. According to recent benchmarks, the average time to fill a role is 41 days. Executive roles can take much longer.
You want to avoid hiring a poor fit for the position or company, as this could cause friction down the road and result in the loss of an employee. You’ll then end up hiring for the position all over again, and when hiring costs can be anywhere between $7,000 and $28,000, high turnover rates can bleed your company dry.

HR professionals help handle the recruitment process, making it easier to find talent, hire the right candidate, and get them up to speed quickly.

Managing benefits and PTO

Compensation is only part of the package. Employees also care about perks and benefits. These can include:

• Leave and paid time off
• Health and wellbeing
• Work-life balance
• Retirement and financial benefits

Without an HR pro, these offerings often lack strategy and consistency. A dedicated HR team ensures your benefits are both competitive and aligned with employee needs.

Training managers and employees

It’s often said that “people don’t leave companies, they leave managers”—in fact, 9% of employees left their job in 2024 because of their direct manager or supervisor . Now while it’s true in some cases, the answer to the entire problem isn’t that simple.

Few people feel passionate enough about what they do that they’re willing to stay in the same role all their working life. Most want upward mobility: additional challenges, additional responsibility, and additions to their paycheck. When employees feel like they’ll never be recognized or appreciated for their efforts or talent, engagement can drop sharply, and employees may start thinking about leaving.

Having HR professionals who can help employees and managers develop their skills turns the tide in this struggle. Instituting employee training and development helps employees work towards qualifying for more advanced positions. Meanwhile, HR training and development for managers means they’ll be more capable of coaxing the best work out of their teams.

Streamlining the onboarding process

Too often, onboarding is left to chance. But having an effective onboarding process can help contribute to higher retention and productivity.

The importance of human resources management can shine through here by crafting a more engaging, more effective onboarding process. What’s more, they can create onboarding that’s specific to the job in question.

Resolving interoffice conflicts

Employees spend an average of 2.8 hours per week dealing with workplace conflict. Yet only 30% of workers feel confident in their managers ability to handle conflict effectively.

That’s why it’s helpful to have HR professionals that employees can reach out to. HR teams who have trained in conflict resolution are prepared to handle the difficulties of interpersonal conflict. Besides, training a single HR department is far easier (and less costly) than training an entire organization of managers. The less conflict you have in the office, the happier your employees will be and the more engaged they will be in their work.

Handling legal concerns

In 2024, the EEOC received 88,531 new charges of discrimination. That’s not taking into account all the charges that were filed. It’s safe to assume many more incidents went unmentioned due to factors like fear of retaliation, lack of evidence, and lack of legal understanding.

Without a dedicated HR professional, it can be difficult to keep track of all the applicable laws and regulations that can ensure a company is on the right track. What’s more, with no HR professional to turn to when there’s a problem, issues may go unresolved (and unnoticed by the company) until it escalates to litigation.

How do I calculate the ROI of HR?

There are a few key performance indicators (KPIs) to measure the ROI you’re getting from your HR efforts: turnover rates, retention rates, and absenteeism.

In 2024, the average absence rate in the US was 3.2%. Most industries aim for a ratio that sits around 85% retention / 15% turnover (or better).

These metrics can demonstrate the impact of your HR team. For example, lower turnover rates suggest a stable and healthy workplace, which could be linked to having a strong HR team.

The cost of not having a HR team

It’s important not to dismiss an HR strategy, as it can have severe consequences such as:

Poor hiring practices

If you’re carelessly throwing a job listing out there, odds are you’re not giving the actual interview and hiring process the attention it needs. This can result in failing to attract the right talent and failing to hire the right employees. And no company can afford bad hires.

Subpar benefits management

These days, you can’t offer a couple of days of PTO and call it a job well done. Nor can you simply trust people to sign up for health insurance. Without an effective HR team, you also run the risk of being less competitive in the job market in terms of benefits and pay. Your HR team can ensure your employees have access to the benefits they’re entitled to and that they’re arranged in a timely and organized manner.

Low commitment to your organization

Half of global workers would take a 20% pay cut to prioritize their quality of life. Without an HR professional to ensure that they’re getting the support they need, they may consider leaving. An engaged and active HR team could increase employee engagement and therefore commitment.

Negative employer branding

We mentioned above that a lot of employees are unhappy with their company’s onboarding process and a bad first impression can lead to problems. A lack of onboarding processes could go unremedied unless there’s someone assigned to the task, and without HR professionals, there’s rarely anyone at the company who has time to devote to onboarding.

Toxic work environment

Toxic work environments can seriously impact your health. Whether it’s friction between co-workers, a boss who won’t listen, or a company culture that’s grown downright malignant, they all take a toll on your workforce. Without an HR strategy in place to help improve company culture and moderate conflicts in the office, employee disengagement and turnover rates will continue to be high.

Implementing HR management

Now that you understand the importance and value HR professionals and HR strategy can bring to your organization, the next step is to begin transitioning into using them.

Key factors to consider include building a cultural vision, tracking key indicators and being prepared to give more regular feedback. You might even want to use technology to make your HR processes as efficient as possible. Discover how to choose the best HR software for your organization in our dedicated HRIS buyer guide.