5 Ways Your Organization Can Invest in Human Resources

Fact or Fiction: HR Edition — HRSA

It’s 2023 and the term human capital management is now a buzzword in the business world. Organizations are starting to realize the importance of the phrase: the biggest assets of any organization (employees) walk out the door every day.

They know that without the people that work in the organization, they will not be able to create the value against which they garner profits. So, small business owners and start-ups have begun to invest in human resources and adopt initiatives to further their efforts.

How to Invest in Human Resources

Now that it is established that investment in human capital is crucial to any business, the question is how to invest?

When it comes to monetary investment, the first thing that comes to mind is a good compensation package. However, according to Hertzberg’s motivation-hygiene theory, money is only a hygiene factor for employees. So, the presence of the hygiene factors does not make much of a difference, but the absence or lack of it is a demotivator. The motivation elements amp up the motivation, engagement, and thus, performance of the employees.

Here are some of the elements that come under each type of factor:

Motivation Elements

Hygiene Elements



Healthcare benefits


Retirement plans


Organizational policies


Work Environment

The work

On the basis of the two-factor theory by Hertzberg, here are ways in which companies can invest in HR:

1.      Growth – Investment in Learning and Development

The first way to invest in HR is to contribute to the growth of your employees. This includes investing in learning and development initiatives. It is not only limited to training and boring webinars. The scope of learning and development goes beyond the office. It can include relocation to another city for a few months, visits to other offices if the company operates in more than one area, or a mentorship program.

Another idea for investment in the growth of the employee is allowing them to study further so they can enhance their skills. If the investment is in line with their objectives, such pursuing a Master’s degree, it will be very effective in increasing employee engagement and motivation.

2.      Recognition – Investment in Reward Initiatives

Recognition does not always have to be monetary. It can be as simple as the manager of the employee calling them into their office to give them a pat on the back for a job well done. Or consider recognizing the person’s efforts in front of the entire team.

At times, investing money in recognition initiatives sustains the charm of reward strategies. Reward strategies should be modified to ensure employees look forward to them. When it comes to monetary investment in rewards, some examples include funding a wellness retreat for them, allowing a few days off work after the completion of a big project, and hiring a temporary employee to cover shifts.

3.      Responsibility – Investment in Career Growth

Just like investment in learning and development initiatives can pay off in the long run, another strategy is to prepare the employees to take additional responsibilities or a better role in the company. The investment could include mentorship programs, allowing them to participate in or lead projects that test their capabilities, and allowing employees to follow a learning curve to hop onto the next level.

4.      Organizational Policies – Investment to Improve EVP

Employee value propositions (EVP) include all the factors that are offered to retain the employee and encourage them to perform well in the workplace. Although organizational policies are hygiene factors, investing in them is also quite necessary.

An example of investing in organizational policies could include giving employees a day off for religious or cultural religious holidays that they celebrate. Another example could be investing in a specialized HR individual or a team that can address employee grievances and complaints.

Also, investing in supplies to improve organizational policies like introducing fingerprint scanning for attendance could be a performance booster.

5.      Work Environment – Investment in Team Building Initiatives

Improving the work environment is quite crucial to increasing employee satisfaction. The work environment can improve through training in soft skills and team-building activities. For example, providing a budget for team dinners and picnics is a great way to help people get along and strengthen their bond.

Another example of improving the work environment could be investing in conducting an HR audit that can help determine the issues in the environment and resolve them. For example, bullying may be a pressing issue in the organization, and investing to resolve the issue will help improve the culture tremendously.

The work environment also includes the office premises. Investing in improving the interior of the office space could also be a great strategy.

Human Resources – A Cost Function

Even though employers might know the strategies and ideas for investing in human resources, they might think that it is a cost function and not something that would yield benefits.

Here are some ways to unlock investment for HR from the top management:

Talk in Numbers

The best way to convince the top management for investing in human resources is to talk in stats. Showing them the results of a previous investment or change could help gain votes in favor of newer investments.

For example, it is up to HR to show the decrease in employee turnover after introducing a new reward scheme. Or a change in employee engagement and an increase in employee performance could be some metrics to discuss with the top management.

Well-planned Budget

Justifying the costs is one way to free up investments for HR since management won’t believe in baseless talks regarding the benefits of the investment. Also, a well-planned budget could also help in securing the budget. It is much like proposals that start-ups present to investors, so it should be done objectively.

Inform them of the Risk

Top management needs to have a risk appetite as well. This is because at times some investments like investing in new technology when the organization isn’t ready for it could backfire. Therefore, seeing it as a learning opportunity could be encouraging for HR to invest in new out-of-the-box ideas.

Some ideas like wellness retreats and a hike in salary could not immediately yield measurable benefits like a lower turnover. However, they could help improve the employer brand which could be measured by conducting surveys from candidates and current employees. Preparing them beforehand and giving them a reasonable time before the assessment and comparison is necessary. This way it can be made to make sure that they don’t expect immediate results of the investment.

Summing it Up

To sum it up, investment in human resources is quite beneficial to the organization. We based our recommendations on Herzberg’s two-factor theory. It is important that HR invest in growth, recognition, responsibility, organizational policies, and the work environment. A lot of strategies can be implemented in attaining these factors.

The best way to go about investing in HR is first justifying the costs. A well-defined plan can help in securing the investment from the top management since the results are not in monetary form. Also, showing the metrics can help in attaining the investment as well.

However, it is important that the top management has a risk appetite since some investment decisions might go wrong as well.

Related articles

Recent Posts
Follow us