Significance of Human Resource Management




Advantages/benefits/Significance/importance/need of HRM

"I emphasize this - no matter how good or successful you are or how clever or crafty, your business and its future are in the hands of the people you hire".  

--- Akio Morita (Late) (Businessman and co-founder of Sony Corporation. Japan )

Ref: The Book : MADE IN JAPAN. Page.No.145

Human Resource Management becomes significant for business organization due to the following reasons.

  • Objective :- Human Resource Management helps a company to achieve its objective from time to time by creating a positive attitude among workers. Reducing wastage and making maximum use of resources etc. 
  • Facilitates professional growth :- Due to proper Human Resource  policies employees are trained well and this makes them ready for future promotions. Their talent can be utilized not only in the company in which they are currently working but also in other companies which the employees may join in the future.
  • Better relations between union and management :- Healthy Human Resource Management practices can help the organization to maintain co-ordinal relationship with the unions. Union members start realizing that the company is also interested in the workers and will not go against them therefore chances of going on strike are greatly reduced.
  • Helps an individual to work in a team/group :- Effective Human Resource practices teach individuals team work and adjustment. The individuals are now very comfortable while working in team thus team work improves.
  • Identifies person for the future :- Since employees are constantly trained, they are ready to meet the job requirements. The company is also able to identify potential employees who can be promoted in the future for the top level jobs. Thus one of the advantages of HRM is preparing people for the future.
  • Allocating the jobs to the right person :- If proper recruitment and selection methods are followed, the company will be able to select the right people for the right job. When this happens the number of people leaving the job will reduce as the will be satisfied with their job leading to decrease in labour turnover.

Facts [+]

48% of employers struggle to find the right candidates: Manpower Survey

June, 2012: Nearly half of India's employers are struggling to fill critical positions because of a severe talent crunch, according to a study on talent shortage by staffing firm Manpower Group.

Although the situation has improved over last year, 48% of employers in the country are facing hiring challenges current year as against the global average of 34%, the study said. Talent is particularly scarce in information technology, marketing, public relations and communications, and engineering, it said. While it was difficult to hunt for R&D, sales manager and IT staff last year, this year the positions are for IT staff, marketing/public relations/communication staff and engineers. Personal assistants, call centre operators, researchers are also hard to find this year.

Lack of available candidates, technical competencies amongst those present,refusal to move to another location, poor image of the occupation, weak soft skills and demand for a higher salary have been key reasons in Asia Pacific for the posts to remain vacant.


  • Improves the economy :- Effective Human Resource  practices lead to higher profits and better performance by companies due to this the company achieves a chance to enter into new business and start new ventured thus industrial development increases and the economy improves.