Human Resources Need To Show Its Value: Here’s How

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Businesses are always on the lookout for ways to make their operations leaner and more cost-effective, which means that departmental budgets regularly get squeezed. In tight environments like these, HR needs to show its value to company executives, and how it helps achieve the firm’s mission.

human resource importance
Shutterstock Licensed Photo – By eamesBot

One of the most significant issues that HR departments face is costs. Recruiting and training new employees can be expensive, and so company bosses will often look at HR financial performance when assessing whether to take action. Sometimes they do.

What can you do to reduce your costs and show value to the company in which you operate as an HR department? Let’s take a look.

Review and Eliminate Unnecessary Programs

HR departments know that if they want to attract talented workers, they need to offer incentives and perks, besides a basic pay package. But sometimes, these incentives go too far, or don’t provide workers real value but are expensive all the same.

For instance, many companies could reduce their monthly expenses by reducing voluntary benefits, like long-term care coverage. Benefits like these are rarely used but can cost companies a lot of money. What’s more, insurance-related compensation is seldom felt by employees. A worker could go through their entire careers without taking advantage of a single insurance product. It’s better to offer incentives that they can feel in the here and now to encourage talented workers to stay.

Stop Relying on Human Input

Many HR departments are still living in the 1990s and doing everything by hand. Not only does it make operations error-prone, but it’s also costly.

Cloud-based HR software like JungoHR can make a difference. Software is now sophisticated enough to streamline onboarding processes, manage vacations, automate emails, gather employee data, and manage workflows. There’s no longer a need for a secretary to sit down and do the whole lot by hand: it’s automatic and practically free.

Stop Raising Salaries Above the Market Rate

HR departments can sometimes make mistakes when it comes to worker compensation. It goes something like this: in year one they provide a position with a generous package of pay and benefits because the company is doing well. Then, they automatically increase the wage every year according to some arbitrary pay inflator so that people can get paid in line with inflation. But the problem comes when this automatic system goes unchecked, and the company fails to check the overall market to see how much specific jobs are worth. Often companies can find themselves paying over the odds for people who should be a lot cheaper.

HR can prove its worth to management by reducing wage expenses over the long term by getting high-quality people at the market rate.

Outsource Some HR Functions

There’s no need for HR departments to do everything in-house, especially if specific tasks are cheaper to perform elsewhere. Many companies now outsource things like scheduling to third-party providers with much greater expertise. As an HR department, you can do this too and slim down your operations dramatically.

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