With everything from recruiting, training
programs, compliance-oriented tasks, benefits administration and more and the
role of HR Professionals continues to expand.
I believe the next step in the evolution of our profession is to gain
the proverbial “seat at the table” and for those in progressive companies is to
secure it permanently and maximizing the potential. It is our job as a group of colleagues to
propel our roles into this next echelon – but how can we do that? In order for us to accomplish this we all
need to speak the language of the C-suite and quantify our positions into terms
they can understand.
I believe it is a misconception that those
who practice human resources do so because they are “people people,” that
engagement with employees and the desire to build connections drives us at the
workplace. While this may be the case in
your particular circumstance we also need to show that we are keenly interested
in the company’s bottom line and be able to convert our profession into dollars
and cents figures as much as possible.
This will help to convey our input and value in terms that are easily
interpreted and, more importantly, show what we can do to an organization’s
balance sheet. Below are some areas that
you can quickly and easily place a numerical figure:
Administrative Expenses Many
outsourced processes are looking to streamline and actually charge a premium to
use particular methods when it comes to utilizing them. One example is a 401k program; after doing
some research it was found that switching to a paperless system actually saved
our company $500 per month(!). Doing
some due diligence may allow you to find similar cost-saving measures that have
nil to zero impact on your company – except saving money.
Recruiting Costs Using a
professional recruiter, an organization can expect to pay anywhere from 15-40%
of an individual’s yearly salary per position – if not more. If you are able to use a company resource,
independent job posting or referral you can quickly and easily show a value
saved to your organization. Once an
individual has been with the company more than 90 days and if they are a good
fit you can conservatively estimate the saved costs to your company by taking
15% of that individual’s salary (sans whichever costs in terms of time and
expenses you had) and add that to your financial contribution.
Reducing Turnover This is a
huge area for HR professionals and an area we are always looking to
improve. While there are many
unquantifiable issues with turnover including decreased morale, lost knowledge
and potential damage to employer brand, what actual costs go into
turnover? There are many, including but
not limited to administrative fees, applicable benefits for departing employees,
portion of time spent training employee, lack of productivity during
introductory period, amongst others (a SHRM worksheet, originally provided by
the Department of Labor, helps to fully explain all parameters catered to your
organization here. In very brief terms the cost to replace an
employee is between 30-150% of an employee’s annual salary. If you can reduce the turnover during a
period of time, give yourself and your department credit for saving 50% of all
salaries based from the turnover decrease.
While these items are certainly not 100% and
need to be monitored to ensure fairness and quality of operations they are a
great way of using concrete figures to help communicate the sometimes vague
benefits of a HR department. With this
information at your disposal you can then propose for additional spending in
areas that would truly help the company – and you’ll have the vernacular to
speak to the C-suite, have your voice heard and be a central partner in your
organization.
Thoughts and feedback welcome!
@kcoynehr
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