In today’s highly competitive business environment, human resources are not merely an operational function but the lifeblood of a company, directly determining its survival. In the following article, KMC will decode the importance of human resources for businesses, helping you clearly understand the role and significance of human capital in the journey of building, developing, and achieving success. In addition, we also provide comprehensive solutions to help enterprises build and develop their workforce.
What is Human Resources?
Human resources refer to the collection of individuals or groups of individuals with the capabilities and skills to perform tasks within an organization, enterprise, or system. Human resources include workers who may be recruited or hired externally (external workforce) as well as those currently employed within the organization (internal workforce).
Human resources are not limited to the number of employees; they also encompass the totality of intelligence, skills, experience, and professional ethics. For FDI enterprises, this is considered the most valuable intangible asset and the core factor that creates sustainable competitive advantage in the multinational labor market.
The Importance of Human Resources for Businesses
In the fiercely competitive global business environment, human resources are not merely an operational function but the lifeblood that determines the survival of a company—particularly for FDI enterprises in Vietnam. A study by Harvard Business Review revealed that businesses making strategic investments in human capital achieve profit margins over 50% higher than their industry peers.
The key roles of human resources in a business include:
Contribution to Innovation
Human resources are considered the living assets of an organization or business. Employees bring with them knowledge, skills, and experience, along with the ability to think creatively, generate ideas, and solve problems. This enables human resources to enhance efficiency and strengthen the company’s competitiveness in the business environment.
Driving Performance and Achieving Goals
Employees play a crucial role in carrying out organizational tasks and activities to achieve business objectives. Their skills and work capacity directly affect productivity, operations, and the quality of products and services. A company with a highly skilled workforce can maximize efficiency and achieve its goals more quickly.
Building Competitive Advantage
With a superior workforce in terms of expertise, skills, and creativity, an organization can respond effectively—and even take the lead—in the face of changes in the business environment. This creates a competitive edge, enabling the business to outperform rivals and move into a leading position.
Creating Value and Ensuring Sustainable Growth
Human resources contribute to creating value for the organization and ensuring sustainable development. Properly trained, developed, and evaluated employees improve both their professional expertise and mindset, generating benefits for themselves and the company alike. When employees feel confident and satisfied with their work, they are more likely to remain committed and grow within the organization.
Especially for FDI enterprises, having a high-quality workforce with strong knowledge of local culture plays a vital role as a bridge between the headquarters and subsidiaries or offices in other countries. This helps foster connections, balance multicultural integration, and build long-term sustainable values.
Unforeseen Consequences of Underestimating Human Resources
Not all businesses fully understand the importance of human resources, leading to mistakes in managing, developing, and evaluating employees. These missteps result in serious consequences that come at a high cost, such as:
- Financial Losses: The cost of replacing an employee can reach up to 150% of their annual salary (SHRM). Manufacturing corporations in Bắc Ninh face losses of up to USD 2 million per year due to an employee turnover rate of 35%.
- Decline in Productivity: A toxic workplace environment can cause productivity to drop by 40%, according to Gallup reports.
- Loss of Competitive Advantage: Businesses lose the ability to attract top talent when their employer branding is damaged.
- Legal Risks: Violations of labor regulations can result in fines of up to VND 85 million per case (Labor Code 2019).
Therefore, the process of recruiting, building, and maintaining a high-quality workforce must be carried out in a systematic and consistent manner to maximize the potential, role, and importance of employees in the journey of building and growing a business.
How to Evaluate the Quality of Human Resources
Understanding the importance of human resources, businesses also need an accurate measurement system to develop strategies for building, investing in, and further enhancing their workforce.
To assess the quality of a company’s human resources, we can focus on four key factors:
- Employee Engagement Score (eNPS)
- Departmental Goal Achievement Rate
- Innovation Index (number of patents/improvement proposals)
- Training Cost as a Percentage of Revenue
With this comprehensive evaluation, managers can identify bottlenecks and optimize recruitment and talent management processes to build a superior human resource foundation.
Comprehensive HR Solutions for Japanese FDI Enterprises in Vietnam
For FDI enterprises, building and developing human resources requires even greater investment and care in order to achieve outstanding growth and create sustainable value in the host country.
Human resource development for FDI enterprises should focus on:
- Building HR Strategies: Designing competitive compensation and benefits systems, policies aligned with corporate culture, and above all, ensuring full compliance with Vietnamese labor regulations.
- Developing Leadership Capacity: Training a high-quality local management team capable of embracing Japan’s Monozukuri (manufacturing spirit) while understanding Vietnam’s labor culture.
- Optimizing Operational Processes: Automating payroll, contract management, and insurance processes with 100% accuracy.
Measurement & Optimization Solutions from Experts
The role and importance of human resources for businesses are undeniable. However, according to surveys across companies of different sizes, more than 60% of businesses still do not know how to properly invest in and develop their workforce.
If your business is also struggling to build a suitable HR strategy and is seeking comprehensive solutions to attract and develop high-quality human resources for your FDI enterprise, contact KMC—our experts will advise and accompany your company in building and implementing a high-quality HR strategy that includes:
- Developing a KPI system aligned with business goals
- Designing regionally competitive compensation and benefits policies
- Ensuring full compliance with Vietnamese labor laws
- Providing solutions that help reduce HR administrative costs by up to 40%
With 15 years of experience supporting over 300 Japanese enterprises in Vietnam, KMC deeply understands the unique challenges of managing a multicultural workforce. We help FDI businesses build high-quality HR development strategies for sustainable growth. Beyond HR, KMC experts also provide professional tax and accounting services to ensure full legal compliance.
📞 Contact our hotline at +84 91 988 9331 to have KMC experts support and accompany your business today.
