When setting up an online marketplace, it is common to look for certain pillars of the “normal way of doing business” that simply don’t apply to the digital age. You’re already operating primarily on a new frontier – the Internet – so it doesn’t make sense to keep certain aspects of the “old way of doing things” around if you don’t have to. This type of mentality can lead to a leaner, more efficient business and one that is poised to innovate on a regular basis at the exact same time.
One of those pillars that you really can’t do without, however, comes down to a human resources department. For an online marketplace, human resources is about more than just the organization of your business. It has a number of essential implications when it comes to the hiring, administration and training of personnel that you need to be aware of moving forward.
The Benefits of Human Resources: By the Numbers
Having the stable foundation of a human resources department at the heart of your marketplace also allows for significant gains in terms of employee productivity and your larger company culture, both of which are hugely important in terms of long-term success. One study estimates that in 2015, just 32% of workers in the United States said that they were engaged with their jobs on a daily basis. Less than half of all employees would recommend their employee to a close friend.
Setting the tone for your marketplace by way of a human resources department, on the other hand, has a ripple effect that touches performance on every level. Companies with human resources departments and employee engagement programs tend to see a 26% year-over-year increase in annual revenue according to Aberdeen. They also unlock 30% higher levels of innovation (something essential to succeeding in the digital world) and 40% higher levels of employee retention at the same time.
The Role of the Human Resources Department
It’s important to keep in mind that a human resources department is responsible for a lot more than just making sure that the company handbook is regularly updated. Basic human resources tools like business process redesign, organizational redesign, competency model development and more allow you to more effectively align your sales process with your support process at nearly every level.
Consider this from the perspective of attracting talent. Any digital marketplace that wants to remain competitive needs a stable of A-level employees who are firing on all cylinders at all times. Finding these employees is often a lot easier said than done, as you’re looking for people who possess unique skills and talent in a sea of similar marketplaces who are all trying to do the same thing.
A good human resources manager has access to resources in this regard that you won’t have on your own. Solid HR managers know how to attract the best people and persuade top notch candidates to your organization. They know how to keep these people happy and satisfied and as productive as possible. They’re your first line of defense against employee turnover, something that is typically equal to 213% of the cost of one year’s compensation for that role.
Human resources professionals are also essential when it comes to dealing with inter-office conflict, something that will be present in even the most stable and successful of businesses. Remember that according to another study, 89% of American employees said that they would consider a lateral move to another company with NO financial incentive present. A stunning 57% of them said that they would be willing to apply for a position that seemingly offered greater satisfaction. Existing problems with both their immediate superiors and their co-workers are major contributing factors to this phenomenon.
None of this is to say that adding a human resources department won’t also introduce certain challenges into the equation. This will introduce a type of rigid structure or specific “way of doing things” that younger employees in particular may not immediately be thrilled with. It’s a staple of brick and mortar businesses that some might argue has no place in the digital age.
But again, the major benefit of bringing on a good HR manager and a solid HR department goes a long way towards keeping your employees motivated. Keeping them challenged. Keeping them encouraged. This won’t just help put you in a position where your employees are performing 20% higher than those who aren’t – it’ll give you the competitive advantage you need to survive the next few years and beyond.