Do Human Resources Department Make Money?
PRESENTED BY PAYSTUBMAKR.COM
What is making the role of HR a strategic business partner
Here are three examples of HR linked to profitability metrics:
HR team developed to process and a program of training in customer service, sales, project managing, process improvement and development of leadership that ware focused on essential performance topics for the whole types of customer.
The HR made a partnership with the departments, operation sales, and customer service, the HR took the role of catalyzing for forging alliances, partnerships, and agreements. The HR efforts improved relationships that were understood in “Preferred Provider Status”, that influenced positively on sales and lowered costs.
The costs of this HR project were liquidated by charging a fee for the service and creating revenue.
In two years period, the HR group made sales of $4 millions of which 30% was a net profit that was returned to the company budget.
The second case cost the chief credit officer his job. The HR and the audit staff found out that the account receivable was dragged to 45 days instead of the rule of no more than 30 days.
To avoid the account payable issue the HR identified candidates that have the ability to control the collection of payable on time. The HR commandeered finance a new credit officer and within six months the ratio was reduced to 35 days.
In a third example, a new health care plan was negotiated by a joint team of HR, sales and marketing departments. The joint team was looking on a solution that will not be eroding the company’s market share and competitive price strategy. A new benefits program design with cost/benefit objectives was achieved without losing market share or competitive price.
Profitability Factor and Transitioning Human Resources
How to make the transition? Here we have some suggestion about how to make the transition and have the employees know better and being involved in the business, the more they know they will be more productive.
Create your leadership development program using hand -on training that will include all the disciplines. For example, the production department needs to identify the limits that make it difficult for managers to achieve efficiency and saving.
The HR staff will receive financial training so they will be able to understand the impact of cash flow, receivables, billing, and payable accounts. In the case of a public company teach HR to understand the company’s annual report or the 10-K. Reading the statement will help to understand some of the information if not all, and get some idea about the company’s financial situation. It may be hard to compliantly understand the accounting jargon.
When HR staff will participate in the sales strategy making, visits of customers, technology for the general managing, and quality issues, and negotiation with suppliers and customers. Engage the HR people in the processes to talk about their ideas and listen to the other staff thinking for the growth of the company.
It is very important to hold accountable all the staff for achieving the result or the critical numbers known by the company.
An excellent HR department will be irrelevant to the company is falling into bankruptcy.
An HR that is powerful and keep its values will avoid sledding into bankruptcy.
The HR department must be an organic part of the whole managerial and executive team that takes part in leading the organization. The HR will open new avenues building your company base of employment that will answer the needs for employees that make it work as a whole workforce dedicated to the success of the company. Once your HR understands the type of employee you need in each working station or role you will have the best people in the right place. Leaving the tradition of looking for a simple accountant that will make bookkeeping with one that can analyze the figures and comes with the solution or alerts problems on time. A production manager, not only a highly experienced technician but a leader that will make the production team be happy and contribute the maximum.
The employees are the assets of the company
You can have the best machinery in the world, they know how to make the most attractive product, and all the money in the world and yet have no production, and sales if you have no employees to do all the jobs related to making sales and delivery of goods or services. The workforce of the company is the fruit of the HR hiring job, it means that your choice of your HR team is the most important step after that you made your business plan and got the funds you need. Find the right HR manager first, let him look for the right people and give them the broadest training as we mentioned in this articles.
paystumbmakr.com team thanks you for a visit and reading this blog Paystub
Disclaimer: John Wolf and paystubmakr.com are making a total effort to offer accurate, good, ethical HR management, employer, and workplace advice. We do not use the words of an attorney and the content on the site is not given as legal advice. The website has readers from all US states which all have different laws on these topics. The reader should look for legal advice before taking any action. The information presented on this website is offered as a general guide only and never as legal advice.