| Selling the Value of Human Resources |
You know your HR department sizzles. You and your staff work hard to ensure its various functions operate smoothly to support the overall health and success of your company. No problems, no gaffes, no major false moves from your team.
But before you hand out more "atta-boys" at your next staff meeting, perhaps an internal reality checkup is needed. There's one internal audience who needs to understand well the worth HR brings to the organization: upper tiers of senior management. If HR isn't on their radar screen when value-added sections of the company are discussed, today may be the best day to start selling your department.
For many it sounds strange - that "selling" part. Isn't the value, well…obvious? Amazingly, the answer may be "no" in some organizations.
Bring in the Expert....
"HR needs to understand the importance of aligning its goals with corporate business goals," explains celebrated HR industry veteran and speaker David Russo. "By doing this, HR can deliver programs and policies that have bottom-line impact and add business value."
Russo intimately knows the language that grabs the attention of the penthouse crowd, and has war-room tested answers to the problem posed in this article. Presently he is Executive VP for Human Resources at BuildNet, Inc., a leading provider of supply chain synchronization solutions to the $800 billion construction industry. Prior to this position he spent over 18 years at SAS Institute, the world's largest, privately held software company. His implementation of cutting-edge HR programs, processes and policies brought SAS Institute national recognition (i.e., Fortune, Working Mother, and Workforce magazines) as an innovator in providing the benefits of a quality work environment in supporting work/life issues.
Moreover, the industry veteran received the Society of Human Resource Management's 1999 Award for Excellence in Human Resource Management, and was an "Honor Role" recipient from Human Resource magazine. He sits on the Society of Human Resource Management board of directors, and is involved in other notable HR organizations.
Align Goals: "Data Alone is Not Strategic"
Russo maintains that for the HR function to reach its potential as a strategic asset for the company, it must use data to drive decision-making that impacts the organization's profitability.
"Data alone is not strategic. However, the proper use of technology can turn raw data into meaningful strategic information that can be used to aid decision-making. Turning raw data into useful information is the real value technology brings to the human resources function. It enables HR practitioners to demonstrate in numbers and-conversely--in dollars, how decisions that affect employees affect the bottom line."
The selling process is different when the size of the department is measured, he adds. "In many smaller HR organizations the staff, budget and/or infrastructure just aren't in place to support using internal data to highlight HR's potential to add value to the company's vision and business objectives." What's the best solution if you're trapped in such an employment scenario?
Russo suggests that in these cases HR leaders should "look to the outside for benchmarks and best practices exhibited by other HR groups in like organizations to quantify and qualify the possibilities. Research and examples become critical factors vs. applying available resources to the project, as one would do in a large company setting."
HR by the Numbers
By analyzing data, Russo contends HR can easily demonstrate how high levels of employee turnover will cost an organization big money.
For example, Russo points to a company with 5,000 employees to show real-life solutions. "The data indicates the turnover rate last year was 3% compared to an industry average of 20%. The difference between 20% and 3% is 17%. Multiply 17% by 5,000 people, and that's 850 people. What does turnover cost per person? Calculate it in terms of salary. Industry data tells us that the average cost of employee turnover is one year's salary, and that the company's average salary is $60,000. If we multiply $60,000 by 850 people, we can see that low employee turnover saves the company more than $50 million a year."
Voila. It really is that simple for savvy managers to take the HR function from the back room to the board room. Just use existing data to align HR's goals with the company's overall business goals. Try it in your organization. |
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LISA
BASTIAN / E-cruiter.com |
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