Human Resources: No Longer a Cost Center? Prove It!

Over the past few decades, the human resources department has shifted focus from a reactive administrative function to a proactive strategic partner, employing cost-saving strategies that are aligned with organizational goals and focusing on long-term performance. Despite our best efforts, many organizations continue to view our field as a cost center rather than a business partner. Why is this pervasive theme consistently plaguing our efforts to prove otherwise? Is it because the historical function of the human resources department colors their perspective? Maybe. Whatever the reason, each of us has a duty to continue developing our departments and provide best-in-class service to our employer. Whether you’re an entry-level specialist within one of the human resources disciplines or a manager/director/VP-level generalist, your goal should be to increase productivity through the employment of best practices. But, how do we prove our worth and remove the stigma from our chosen profession? How do we erase the typically bored, sometimes morose, and often panicked or hostile look in people’s eyes when you inform them you’re in human resources?

Well, there’s always the option to be intentionally vague about what you do when introducing yourself. It’s sometimes an intriguing notion when asked the common question, “What do you do?” to answer with, “I ensure optimal performance through the development of cross-functional strategy in alignment with organizational goals, provide directional leadership, and evaluate process efficiencies to identify, isolate, and correct bottlenecks in order to mitigate costs, ensuring sustainable and profitable growth within the industry.” Sounds great, doesn’t it? Certainly better than saying, “I’m the HR Director.”  To you it means the same thing, but to others…not so much.

For some reason, people are clinging to the idea that human resources has maintained the passé “personnel department” approach rather than embracing the value that HR leaders bring to businesses across the globe. How do we make employers understand that, “I’m the HR Director,” isn’t an idiom to saying, “I’m a boring and costly paperwork pusher?” Here are a few ways to start, and the sooner the better:

Metrics.

One of the most compelling (and easiest) ways to provide proof of the value your department provides to your organization is to track metrics. It’s a fairly simple process to do manually, and even easier if your HRIS system generates them for you. If you don’t know where to start, try the SHRM’s templates and samples page, which has a thorough listing of metrics along with calculators that boast a plug-and-play interface. Just plug in your numbers and voila! Your metrics are waiting! 

Go to http://www.shrm.org/TemplatesTools/Samples/Metrics/Pages/default.aspx to find out more about these useful tools.

Costing.

Once you have your metrics (like turnover, time-to-hire, applicant ratios, absenteeism, etc.) you should calculate their cost. Turnover has a cost for new hires that includes sourcing, selecting, onboarding, and training. For example, let’s say your employee headcount is 1,000 and your current turnover rate is 20% with a cost per hire of $4,500. If you implement a recruiting and retention program that reduces your turnover to 10%, you just saved your employer $45,000.00 per year. Now you have some metrics that you can present to your employer that will show them your value! If you’re not sure how to use costing in human resources, there’s a great book that I recommend called Costing Human Resources: The Financial Impact of Behavior in Organizations by Wayne F. Cascio. There’s probably a more current edition than my Fourth Edition but the concepts and formulas are the same. The goal of costing in human resources is to calculate the cost of NOT doing something. If you implement a program that you have shown reduces tangible costs by 400%, your CFO will be more open to your ideas. If you continue to show cost savings, you’ll be an unsung hero and earn a ticket to the coveted annual retreat! Well, maybe…

Communication.

If you are one of those people who sends an e-mail for everything, you should change your medium. E-mails are effective when it’s a brief message, like letting people know that an auditor will be in the office or distributing a newly adopted policy (which should only happen after training is completed, in person with a trainer, who can review the new policy and answer any questions). When it comes to important issues, like reviewing a report outlining a new compensation structure you wish to implement, or a cost analysis for a program you want to convince your boss to add to next year’s budget, you should always meet face-to-face. Communication is most effective when using nonverbal expression. Only a portion of a persuasive dialogue should be verbal, which is the text of the message. Once you’ve perfected your message, practice your body language, vocal tones, and facial expressions so that you project confidence without arrogance. Poor body language, inappropriate facial expressions, or anxious/obstinate vocal tones can ruin your presentation and will ensure you won’t gain any traction with your audience in the future.

Collaboration.

You’ve been listening to people complain constantly about your recruiting process and you’re ready to change it. Don’t start writing an SOP just yet! Most people are resistant to change, even if it’s going to make their lives easier. In order to navigate the change-averse mindset and implement a successful program, use change management strategies, which should include diagnosing the issue(s) with the current processes, identifying the effect any change will have on stakeholders, ensuring an effective training program is included in the changes, and obtaining buy-in from all levels of the organization. So, where do you begin?

Collaborate! I’ve found the best way to do this is to form a “leadership committee” comprised of leaders from each business unit within your organization (operations, finance, IT, HR, legal, safety, sales and marketing, etc. with representatives of the sub-functions within each department). Meet with them either in person or through a collaboration medium such as video or voice conferencing every other week so you have an ongoing dialogue of current and future goals and strategies. This will ensure a universal direction within the organization as well as avoid any surprise issues that tend to crop up when internal communication is stagnant or nonexistent. The leadership committee will rely on you to provide an accurate account of the feedback you’ve been receiving. Once the committee agrees that a change is needed, ask for volunteers to participate in a change committee (I usually named these committees after the procedure that will change, such as the talent program change committee). You should identify additional stakeholders (anyone affected by the change) and request participants from each group to become a member of the sub-committee. Changes to talent acquisition programs have far-reaching effects on the entire organization as well as the surrounding workforce, so bringing in a recruiting firm and/or state workforce agent can help provide the group with valuable data on external opportunities and threats. Finding external contributors within your industry would be ideal, but may violate certain types of competitive covenants or SEC regulations so be sure to ask your legal department to sign off on the final committee roster and any committee schedules or rules you agree to.

Once your committee is formed, present the diagnostic findings, communicate the changes you think will improve the process, and…here’s the hard part…ask the committee to find weaknesses in the change you presented. It may be difficult for you to hear, but it’s an invaluable and necessary step to ensure the changes that are made are going to improve the experience for everyone involved. Of course you’d love to switch to an electronic application that ties to your screening and selection module, but if a majority of your applicants are technologically averse or do not have access to a computer, then it won’t improve the process for your hiring managers, who will lose qualified applicants.

Collaboration has the power to take an ineffective organization with clashing strategies and inconsistent margins and make it into a name brand that leads the industry into a new era.

Branding.

Branding is a marketing term, but the idea behind it is being used by companies, groups, individuals, and internal departments to effectively communicate their cultures, philosophies, personalities, and more. I think the term is probably overused in today's social media climate, but the technique is rarely employed correctly. The key to successfully branding your department is coming up with a brand that reflects your message and maintaining it. Constantly changing your brand could inaccurately communicate that your department is disorganized, inconsistent, or worse. So arrange a meeting with your department and come up with a brand that you think will accurately reflect the image you wish to portray to those around you.

Once you have formed a brand, don’t let it sit in the shadows. Open social network accounts like LinkedIn, Facebook, and Twitter.  Create a website with a unique URL related to your brand (like company.StrategicHR.com or www.company.com/HR_Leaders). Start a blog that everyone in the department can contribute to (with a moderator to approve of the content). Make sure the theme is the same on each site with a message to the reader that reflects your brand. Once you’re up and running, start sharing links within the organization and across your own social network. You’ll be amazed at the feedback you’ll receive and surprised by the people who notice!

                                                                                                                               

These are just a few of the ideas I have on how to break the “personnel” barrier and make sure your department is valued as a contributor to organizational success. What ideas are waiting to emerge from your over-achieving minds? Please share!