Benefits from HR

How is HR adding value to your organization?

HR pros affect the bottom line through your key assets – your talent.

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Many employees view human resources as the company watchdog, focused only on compliance issues such as documentation, wage and hour laws, and preventing harassment or discrimination. But compliance, even though critical, is the minimum level of HR contribution. The human resources department can actually be an incredibly valuable strategic partner to management at any organization. Here are two areas in which HR helps contribute to the bottom line. If your HR group lacks either time or skills to work in these areas, you may want to consider outsourcing HR projects or management to complement your existing staff.

Invest in your key assets – your staff

For many organizations, the largest asset on the books is the talent your payroll brings to work each day. How are you protecting and growing the value of that asset?

Training is many times a given for entry- and lower-level positions, with strictly regulated routines. But as employees move out of task-oriented jobs into autonomous management roles, training for these new positions often lags behind.

No one is born a manager. In addition to the technical skills a newly promoted employee may already have, he or she needs support in other areas: managing for engagement, leadership, communications, and conflict management, among others. Those skills can be learned numerous ways, including professional development classes, mentoring or coaching, and on-the-job training.

The best combination depends on the employee and the skills needed, but generally it is a combination.

Professional development sessions are excellent for teaching employees more about self-management as well as managing others. On-the-job can be another great way to grow employees’ skills – but only if the manager or supervisor is demonstrating those skills in a way you want the employee to mirror!

You may not be able to draw up a professional development program for each employee. But it is your job as a leader to look for the next generation of leadership to build on strengths and minimize weaknesses that could prevent them from assuming that role.

This approach pays off in two ways: First, you increase the potential of your employee capital to earn for the company. And second, you have built “bench strength” across your organization so that no single person is so critical that his or her departure would cripple the company’s ability to perform.

Cost-effective employee retention

Of course, investing in your employee capital pays off only if you retain them. A study from staffing firm Robert Half showed that inadequate salary is one of the top reasons employees leave jobs. While companies may claim they can’t afford to pay more in salary – the truth is that they’ll often end up paying MORE in turnover costs.

A Hay Group study of retention estimates that the average turnover cost of a $40,000 professional is 18 months’ salary ($60,000), and six months’ salary for a $12-an-hour worker ($12,500). So if your salaries are not competitive with the labor market, you may be saving pennies to spend dollars.

A lack of challenge is another main cause for employees to look elsewhere. In a 2017 Korn-Ferry survey of nearly 2,000 professionals, 73 percent said that if they plan on being in the job market this year, it’s because they’re looking for a challenge.

Yet another key reason employees leave is for a “better benefits package” – and here’s one place HR can definitely affect the bottom line. Use an employee survey to find out which benefits are most important to your employees.

Surprisingly, it’s not always the most costly ones. For example, flexible work scheduling, one of the most desired employee benefits, costs an employer very little compared to other benefits employees value less but which cost more to provide. By understanding which benefits are most critical to employee recruitment and retention, you have the potential to both increase employee retention and cut costs.

Bottom line: in an increasingly competitive labor market, attention to human resources best practices can offer much more than regulatory compliance. HR can be a strategic advantage as well as a profit contributor if you are willing to broaden your thinking about HR’s role in your company’s success.


For more information on the value of HR, contact Carrie using her information below.

Carrie Cox

Vice President
HR & Org. Development Services

Carrie has experience in a variety of human resource functions, including labor laws, compensation structures, employee classification, benefits administration, performance management and human resource best practices. She has served clients in a number of industries, including manufacturing, construction, banking, government, and not-for-profits. Carrie is a member of the national and local chapters of the Society of Human Resource Professionals (SHRM) and serves on the Wichita chapter board of directors.

She is a certified practitioner for the Myers-Briggs Type Indicator® and the Hay Group’s Emotional and Social Competency Inventory. Her additional certifications include Certified Professional Coach from the Academy of Creative Coaching, Professional in Human Resources (PHR) from the Human Resource Certification Institute, and SHRM-CP designated by the SHRM.

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