How do you track the impact of HR to your bottom line?
Oh, you aren’t?… Don’t worry you are not alone. In Working America, we are beyond the early adoption stage of viewing HR beyond an administrative function, but still many companies are using a band-aid approach to HR Strategy.
If you are using the band-aid approach, it is likely you have recognized the costly side of HR and have put processes and partners in place to control costs. It is also likely that, in doing so, you implemented more systems for yourself. According to HR.com, 74 percent of organizations use four or more systems in addition to an HRIS. How many minutes per day do you think are spent just signing in and out or importing and exporting data between all these systems? (If you know because this is your day-in-the-life, do that calculation and let us know.)
Since the beginnings of “personnel administration” in the early 1900s (or at least when someone put a name on it), HR has come a long way. Today, HR is a vital strategy to business continuity, staying ahead of the competition, and/or revenue growth. So is your HR strategy set up for life or death? To lead your company to thrive or burn out? Whatever your goals may be – HR should be at the core of the strategic plan.
3 Ways HR Adds Value to the Bottom Line
Attract the right talent
What does is really cost you to recruit and advertise for a position? (If you aren’t spending money on advertising, consider the payroll dollars for the salary of the person responsible for recruitment. What if you spend your budget and still haven’t found the right person? Even worse, what if you hire the wrong person? What will their turnover cost you? (Don’t forget about potential unemployment claims.)
The turnover of an $8/hour employee can cost a business around $3,500. Companies spend an average of $1,886 and 47.6 hours a year on training for each employee, according to Investopedia. While engaged teams show 21% greater profitability, 17% higher productivity, and 10% higher customer ratings, states a Gallup survey.
Increase their value
Investing in growing your employees’ knowledgebase and skillset creates loyalty and measurable ROI for the company. You will simultaneously improve customer experience and employee experience. Ever heard of Revenue per Employee? Revenue per employee is the total amount of revenue a company earns divided by the number of employees. People are your biggest asset. How are you creating people driven ROI?
Let’s put people not paperwork at center stage.
Would you rather your HR team be spending your payroll $$ maintaining written employee records, reviewing onboarding documents for compliance/ accuracy, importing and exporting timekeeping records, filling in spreadsheets for benefits enrollment, writing up performance reviews, digging through files for performance or conflict investigation OR recruitment and retention strategies, training and development programs, feedback and communication campaigns, engagement campaigns, etc ?
Which route sounds like it would increase your revenue per employee? The more manual work, and human hands, you have involved with employee records the bigger the risk for error, security, and noncompliance you are assuming. This can be costly from data breaches to lawsuit settlements to catastrophic losses.
So I ask, do you want your HR to be bottom line draining or money making? Maximize on your people and drive up your revenue per employee by transforming your HR with technology that will fuse together talent attraction, payroll & HR, workforce (labor) management, and engagement management.