The false economy of neglecting Human Resources

In some companies, HR can be seen as an add-on as opposed to integral function of an organisation. There are two obvious reasons for this; firstly, HR doesn’t always offer the same kind of excitement or glamour as something like R&D or sales, and also many HR professionals struggle to illustrate the value that HR can bring to an organisation.

Adding Value

How one adds value to an organisation’s HR function depends partly on what sort of HR function it has. Many organisations will have Human Resources staff who manage things like holidays, disciplinary action and more administrative duties; in this case it’s fairly simple to suggest that of course an organisation needs these roles fulfilled, if not operationally speaking then legally so. For more complex HR operations, such as engagement surveys and psychometric testing, the benefits are less obvious but no less important to things like the bottom line of an organisation, or it’s productivity.

Justifying complex services

Justifying the outlay for more complex services depends entirely on what that service is. Sometimes it’s useful to use 3rd party research, for example looking at how much it costs to hire a new employee (taking into account not just salary, but recruitment costs, training costs and other peripheral outlays), and if current processes mean that they then leave the organisation after only 6 months, then it’s fairly easy to relate that back to the benefits of something like psychometric testing, specifically testing that can make sure organisations get the right person for the job.

The same goes for something like engagement surveys; finding out how your employees feel about their position and their engagement with it means you can either carry on as usual if the results are positive, in the knowledge there will be little if any staff turnover, whilst if the results are negative, changes can be made and costs for new hires avoided.

Lastly, for more ‘abstract’ services, such as those which aim to either create or change a company’s organisational culture, a more detailed approach is needed. First the problems of the current culture must be identified, before the advantages of a new one can be floated (something which might already have been done by the organisation, leading them to seek outside help with the task at hand, or that might have been suggested by the outside agency after being called upon to solve the problems). Where a new culture is being created, the benefits expected will be more broad, taking cues from earlier projects and research.

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