Strategic HR – Making The Difference (A Return On Investment)

How is strategic HR making the difference in Business and what is the return on any investment you  make in HR strategic support?

This can be broken down into three important areas of impact.  These are the operational impacts, the impact on the employees and the financial outcomes.   They are, of course, all interlinked and of equal importance.

Where is strategic HR making the difference?

The most obvious sphere of influence for an HR professional is the impact on the employees, isn’t it?  That is, after all, what HR means – Human Resources, ie. the people.  But the three areas are closely related.  If the employees feel valued and included then they will be loyal to the Business.  Customer service will improve and the impact on the Business operations becomes more clear.

If employees are achieving at work each day and feel loyalty to the Business, then staff turnover will slow down.  You will find it is easier to recruit and keep your employees.  Those employees will be more productive and will perform their work to a higher standard.

If the operational side of the Business improves, then that will have an impact on the financial outcomes.  Profitability will improve and you will start to see revenue growth.

The impact on your employees

If you have strategic HR support for your business decisions and planning, and if you continue to use HR strategy to improve your employee relations, then the impact on your employees is tangible and marked. When your employees understand their purpose and their importance to the Business, then they begin to appreciate other benefits of working for you.  That is strategic HR making the difference.

If employees feel valued and included, they will perform better.  This improves their sense of achievement and loyalty to the Business. Additionally, this means their interest, enthusiasm, customer service all improve.  They will be positive about the Business and your employer reputation will be enhanced. This will help to improve recruitment, turnover, sickness absence rates.  The cycle of improvement will spiral upwards. Again, strategic HR making the difference.

Operational Impacts

In addition to improved turnover, absence statistics, performance as outlined above, there are other potential operational impacts of strategic HR intervention.  Improved performance leads to higher quality and fewer concerns about safety.  If employees are engaged, then they will notice if things are not quite right and they will care about making improvements.  You will find it easier to comply with legislative and governance requirements.  This leads to a lower risk of legal actions against your Business.  Improved performance can also lead to an improved rate of completing tasks and a higher amount of work being achieved.

Your employees are critical to the smooth running of your Business.  They are a major component of the potential achievement of your business goals.  Your employees are your most important investment and it is wise to nurture that investment.

Financial Outcomes

Arguably, the most important impact that strategic HR support can have is on your bottom line.  The financials are, after all, one of the main reasons why you set up the Business in the first place.

If you take care of the people aspects of your Business, you will find that there is a positive impact on all of your financial measures.

When your staff are happier, you spend less on absence cover, recruitment, performance improvements, and so your return on sales and return on assets both improve.

If customer service has improved and the speed and amount of work has increased, then the obvious outcome is revenue growth and higher revenue per employee.   And because your revenues have improved and your expenses are reduced, this means that your profitability is higher.

A necessity, not just “nice to have”

As with most things in life, some planning and preparation go a huge way to making business successful.  The right support is important, as you run your Company on a daily basis.  You pay for strategic financial and marketing advice, so why not include strategic HR support?

This article has demonstrated that an HR strategist can provide a real and tangible return on your investment. By all means, continue to use an in-house administrator or your Personal Assistant to record sickness and absence. Or to calculate maternity pay and leave and other administrative tasks which you might consider to be HR responsibilities.  But if you value your Business and want to improve your bottom line, then please contact us for a no-obligation chat about the difference that strategic HR can make for your Business.

If you think this article is useful and you would like any strategic HR support or information  on how we can make the difference for your Business – contact us for a no-obligation chat.

Jill Aburrow runs an HR strategic consultancy business – JMA HR .  She provides strategic HR advice and support to businesses who want to improve loyalty, growth and profit. Why not join the JMA HR mailing list?  Jill has been a professional strategic HR advisor for over two decades. She is a Fellow of the Chartered Institute of Personnel and Development (FCIPD) and has a Post Graduate Certificate in Employment Law.

Human Resources, Personnel and Pineapples

Should it be Human Resources or Personnel?  Two people have raised the point with me this week that it was “better” when it was Personnel.  After all, people are people –  not resources like staplers or widgets, which employers can discard when there is a problem, without considering feelings or anxieties.

Why Human Resources?

Historically, the Welfare department looked after the people.  Then Welfare was re-branded as Personnel, to get away from the “nanny” image.  But we have moved on a bit since then.  People are a resource and there is no getting away from that.  Of course, they are different from staplers and need different treatment, but they are a resource which contributes to the effectiveness and success of a business.  So calling them “Human Resources” does what it says on the tin – they are human and they are resources  – and the role of the HR department these days is very different.  Whilst there is still an element of pay and rations, the HR director acts as a strategic partner to the business.  HR is there to help the organisation to use their workforce in the best way to achieve their business aims.

So what is the problem?

The real message behind this concern about the name, is that people feel unloved in the workplace.  They feel as though their employer does not consider their feelings or consult them.  They feel used (like a stapler) and then ignored. As I have stated before, people want to feel they are part of the organisation.  They want to feel that they matter,  and they want to be treated fairly and professionally.

If you get this right, then it doesn’t matter what you call the workforce – personnel, human resources, pineapples (!).  They will be happy and loyal and will be a great asset and ambassador for your business.

We will provide some help for you to achieve this in the near future.  Watch this space!

If you think this article is useful  and you would like more advice on dealing with this  -or any other people-related issue in your business – please join our mailing list, or contact us for further guidance.