HR often gets sidelined in executive suite meetings, but its role is far too important to be overlooked. Effective HR departments and leaders who connect with employees and help them develop create more profitable organizations with reduced litigation costs. Here are five compelling reasons why HR should play a more critical role in your company:

1. The Personal Touch Matters

Regardless of your title—CEO, CFO, HR, or even corporate pilot—having a personal touch is crucial. Just think of the connection that you would have if you were able to meet your sports hero as a kid. Not even a very long interaction, but maybe just a high five and a few words would endear you to the athlete for the rest of your life. One-on-ones, lunches, and really getting to know co-workers has a similar effect in the workplace. This kind of personal engagement can differentiate top performers and foster loyalty and support. In the business context, personal connections with employees can significantly enhance workplace culture and morale.

2. Authenticity in Engagement

Personal touch cannot be faked. Employees can easily discern genuine engagement from obligatory interactions. If an organization tries to feign interest in its employees, it risks being seen as hypocritical. Authentic relationships and genuine concern for employee well-being are essential. Pretending to care is worse than not engaging at all, as it can damage trust and credibility.

3. Reduced Litigation Through Fair Treatment

Treating employees with fairness and respect can reduce litigation costs. While being harsh or disrespectful to employees isn’t illegal, it often leads to disgruntled employees seeking retaliation through lawsuits, whether meritorious or not. High turnover and dissatisfaction can escalate employment litigation. A respectful and supportive HR approach can mitigate these risks by fostering a positive work environment.

4. Reduced Turnover = Reduced Litigation

It goes without saying, a higher employee retention rate reduces litigation. From a purely numerical perspective, reducing employee turnover decreases litigation exposure. Moreover, high turnover is a red flag that companies and HR departments must constantly monitor. When there is an uptick in turnover, an immediate review is necessary to identify potential causes. Employee turnover can be due to external factors beyond the company’s control. However, if a problematic employee or a toxic culture exists within the company, it will likely lead to more litigation.

A-players who create discord can be detrimental to the organization. Employees who are disruptive, regardless of their skill level, can lower overall morale and productivity. Organizations that foster a respectful and collaborative work environment where all employees feel valued and supported will see better overall performance, higher retention rates, and reduced litigation.

5. HR’s Role Beyond Paperwork and Birthdays

HR should be more than just the department that handles paperwork and enforces policies. Administrative tasks like new hire paperwork and policy compliance can be delegated to other departments. HR’s focus should be on employee development and satisfaction, and providing a place for employees to be heard. By prioritizing relationships and engagement over administrative duties, HR can significantly contribute to a positive company culture and employee retention.

As workplace technology increases, direct personal contact becomes even more critical. Creating a genuine culture goes beyond perks like unlimited vacation or ping pong tables. It requires meaningful engagement and a dedicated HR department that prioritizes employee well-being and development. It’s time for HR to take on a more critical and central role in your company’s success.