For small businesses and large corporations alike, the human resources department is important for business success. Human resources performs more duties than simply handling the open enrollment season once a year or processing payroll on a bi-weekly basis. Instead, this department helps to develop a company’s strategy and handles the organization’s employee-centered activities. Here are five reasons why HR is crucial for the success of your company.

1. Budget Control

The HR department develops methods for trimming the costs associated with workforce management, thus curbing excessive spending and helping to save the company money in the long run. These methods may include negotiating better rates for employee benefits such as healthcare insurance. In addition, the HR department studies and analyzes employment trends, the labor market and salaries based on job functions to ensure the company’s wages are competitive and realistic. Since some small businesses have strict budgets to which they must adhere, this function of the HR department is particularly helpful.

Related Resource: 50 Most Affordable Small Colleges for a Human Resources Degree and HR Study 2016

2. Employee Satisfaction

For better or worse, the HR department has the responsibility of determining whether employees are satisfied, not only with their supervisors but also the job and related duties as well. Since it can be difficult to measure satisfaction as it is an ambiguous measurement at best, HR specialists must carefully design employee surveys, oversee focus groups and implement an exit interview strategy to determine how the company can improve in relation to its employees. In other words, the HR department determines the causes and/or reasons behind employee dissatisfaction for current or previous employees and addresses those issues in the best way possible to boost morale and motivation throughout the company.

3. Training and Development

Human resource specialists conduct assessments for the company’s employees in order to determine the type of training and skills employees must have to properly and efficiently perform their duties. Although it is important to ensure that all employees have the qualifications and skills necessary to meet the demands of a position, new companies or businesses in the expanding stage may especially benefit from identifying training needs for existing employees. Companies often task this responsibility to the HR department because it is less expensive for these specialists to handle training and development than it is to hire more qualified candidates or additional staff. In addition, this strategy may also improve employee retention and thus reduce turnover.

4. Conflict Resolution

There will be conflicts in the workplace, regardless of how satisfied employees are with their jobs, their managers and their co-workers. Given the diversity of work styles, personalities, levels of experience and backgrounds of employees, it’s a given that arguments and disagreements will happen. An HR manager or specialist specifically trained to handle relations between employees can identify and resolve these conflicts between a manager and employee or two employees and thus effectively restore positive working relationships throughout the organization. In addition, being able to resolve conflicts may increase employee satisfaction and increase the morale of the workplace.

5. Performance Improvement

Yet another responsibility of the HR department is the development of performance management systems. Without a human resources specialist to construct a plan that measures employee performance, employees may end up in jobs that aren’t suitable for their expertise and skills. Not only will this contribute to employee dissatisfaction, but individuals who consistently fall below the employer’s expectations for performance may sneak by on the payroll, thereby costing the company money on low-performing employees that are not helping the business to succeed.

From improving company morale and developing methods to ensure high performance standards to resolving conflicts among employees and ensuring a company stays within its budget, there are at least five reasons HR is so important for business success.