Human Resources – Cost Vs Profit

Every business needs 5 m’s as input to ensure optimum output. These are- men, money, method, material and machinery. In other way it is an extension of the theory of the factors of production. If we follow the categorization, the four crucial factors of production are land, labor that is the working force, capital or finance and enterprise which provides a basic platform to all the factors to integrate and augment in the desired direction.

The Human resources (or the work force according to the theory) are substantial for any Organisation. Due to the outgrowing challenging situations, more and more Organisations are turning towards forming a separate dedicated functional department for HR. This function is responsible for handling all the activities initializing with the recruitment of the employees and concluding with the exit of employee from the organisation. In comprehensive terms it deals with the recruitment, training, development, maintenance of the employee.

HR emphasizes upon being an inevitable functional department therefore the costs associated with it also can’t be ruled out. The revenue spent on it is quite high but as a matter of fact, HR focuses on getting the best employees whose quality match with the skills required for the job. The human resource if chosen deliberately can be a boon to the company. The motivated and efficient workers being maintained by this department eventually reduce the rate of employee turnover that is the pace of workers leaving the company within a period of time. If the employees don’t leave often then it will certainly reduce the cost spent on the recruitment and training of the newly inducted employees.

Hence it is apparent that the cost of HR is inescapable but the profit it rolls in over a time is worth it.

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