Whether your HR team is in-house, outsourced, or a combination, you want to have a Return On Investment (ROI) from that team. The world has changed, and HR has moved well beyond “That administrative cost center over there in the corner” to a value-added bottom-line contributing professional function.
Obtaining value-added contributions from HR comes from a variety of resources. All of those resources start with people, which being HR, is pretty obvious. How you select, manage, develop and support those in HR is as critical to their success as it is to your business success. After all, HR is about achieving business success. How?
Selection – It remains common for businesses to select their HR staff from a pool of those who like helping people. While not disliking people is essential, wanting to help people should not be a primary or even secondary attribute you seek from your HR team. What is necessary is their ability to understand how the workforce (people) impacts the mission and vision of the business and how HR can help make that workforce successful, which will help make the business successful. That also means that experienced professionals who understand the relationship of HR to business should be your first choice when choosing who will lead your HR function.
Manage – HR is accountable for the single greatest asset a business has – its workforce. HR must be able to address issues of the organization’s strategic goals without being filtered through the views of another business function that has competing priorities. It must be able to communicate in the language of business, which is finance. Yet, it is not a finance function—as such, placing HR under the direct management of finance is not a sound business decision. The workforce is a cost to Finance, and it is an asset to the business – the two are managed very differently. By placing HR under your top Finance leader, you dilute the value that HR can bring to your business. It is imperative that HR report to the top leader of the company. In the words of Jack Welch, “If you value your CFO more than your CHRO, you’re nuts.”
Develop – HR is an asset, and like any asset, it must be cared for. That includes the continuous development of the HR Team. Ensuring that HR team members pursue continuous education and training is as crucial as ensuring any other group of employees in your business do the same. The HR world constantly changes, and to ensure that your HR team gives you the best possible return, hold them accountable for their continuing education.
Support – Good leadership supports HR, but HR must also demonstrate it should be supported. When HR can quantify its value to the business by providing quantitative proof of that contribution, HR has earned support. HR should never be a replacement for management. HR should be supported toward that goal when it states that Managers should do their own disciplinary actions and performance management. Further, HR should be provided technology support when it can make a business case for that support. Just because HR deals in people issues doesn’t mean it can do that with self-created spreadsheets and databases. Good technology support, budget support, and leadership support is imperative for good HR.
If you want good outcomes for your business, you’ll not only ensure you have the best possible HR function, and you’ll hold that HR function accountable for providing a positive ROI. HR has to look beyond savings to demonstrate value. They must show an impact to the bottom line, and occasionally the top line, to fully participate in the business’s success. Finding the right HR team to do that should be a primary concern of the business leader.