Any company’s HR department can be much more than a necessary nuisance! In fact, HR departments can make fiscal contributions to their companies through: 1. cost containment, 2. productivity improvement, and 3. actual profit generation – HR CAN MAKE YOU MONEY!
- Cost Containment. Saving money is code for making money! Ask any coupon shopper. Part of the conventional HR department’s job is to study the costs of benefits, compensation, and even some overhead. After studying these costs, HR can make recommendations as to how costs can be controlled and reduced.
- Productivity Improvement. If you produce more and do so more efficiently, you make more. The traditional HR department is usually responsible for at least 3 things that can help make measurable improvements to productivity.
Training can be done to improve productivity, and ROI can be measured by studying productivity before and after training. Consider using a control group of employees not trained to show a comparison between groups for the purpose of demonstrating productivity improvement.
Compensation (and benefits) can be used to show direct correlation between, say, raises or work-life balance, and increased productivity.
Employee relations. It is important to correct unproductive behaviors and to encourage productive ones.
- Profit Generating. My fave. HR can actually overstep the traditional boundaries of HR and actually generate sales, create products, or produce billable hours.
In one company I helped, for example, the employer used a generalist who made $18 per hour to do compensation analysis for one of its clients, billing the client $45 per hour. The consulting company hired a temp from an agency to replace the generalist at $25 per hour. The client got a deal on the analysis project. The generalist got a change of pace and some specialist experience, and the company made a profit!