I have recently seen a number of articles and blogs asking if HR is still relevant.  In particular, do smaller companies really need an organized HR function?  This question has been asked on a regular basis ever since “personnel management” evolved from the goo of the Industrial Age.  And the answer remains “yes” if your business actually employs people!

In a struggling economy, and especially for smaller companies fighting to stay above water, it is tempting to suggest that the human resource function is a “cost” and that either cutting away HR activities and outside help or trying to redistribute HR responsibilities across several managers or employees makes good business sense.  For example, whoever handles payroll “gets stuck” with other HR responsibilities.  This is a dangerous practice.

Why?  In turbulent times, how we handle the people-side of our business gets more, not less, complex.  Employment related laws and legislation are changing and expanding at a rapid pace.  Lay-offs and re-hires due to a downturn raise important considerations.  Missteps can be costly.  And when you do hire people you now face a vastly expanded pool of applicants.  Who is the right fit and how do we know?  Also many leaders are re-inventing company culture to reflect the new world order.  These are just a few reasons business leaders are hunting for HR advice.   And in fact, HR outsourcing at Red and Associates is growing like never before.

Rapid growth in a booming economy better shields loose HR systems and people problems.  As we look ahead to a more competitive market, as well as a climate of increasing oversight, businesses will require a strong combination of innovation, quality, service, and trust to succeed.  The new frontier for break-through ideas, for zero-defects, for reduced cycle-times, for consistent customer satisfaction, and for a high- integrity workforce will be engaging your people, not just harnessing technology.  Paying attention to who you hire, effectively coaching their performance, leading them through constant change, and motivating a diverse group of people will be the defining factors in the years to come.  Traditional HR administration needs to support a people strategy directly tied to business strategy.

HR is indeed relevant – now more than ever.  So ask yourself:

•    Do we have the best people in place for the future of our business?
•    Are employees being coached and developed for the challenges of the new economy?
•    Do our HR systems reflect the values and the strategic direction of the organization?
•    Are the people guarding our compliance with an array of new employment laws truly knowledgeable?
•    Are owners and leaders spending too much time handling HR issues and desperately seeking more time to do what they were trained and desire to do?

Your answers may convince you that HR really is about your business, and you need it.