How to Make Human Resources a Profit Driver

Discover the best human resources practices and tools that can assist HR in helping your company to increase revenue and succeed.

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How to Make Human Resources a Profit Driver

Here's what you need to know:

  • Those who've succeeded with core HR practices see 3.5 times more revenue growth and more than twice the profit margins of other companies
  • Integrate digital HR tools to help the department move into a more connected role in the company
  • HR should promote mental health awareness and pay attention to burnout
  • Ask HR to manage training sessions and more

For many organizations, human resources often feels like a sunk cost. You need HR to help with hiring, compliance, and employee management.

Yet, you don’t need them to be a drain on your profits. When you do it well, you can turn your human resources department into a profit-driving machine.

Think about business trends and topics floating around right now. There’s a focus on engagement, onboarding, and development tools. These have 1 thing in common: the employee. Since HR empowers employees with resources to do their jobs, it can impact your bottom line in more ways than you might realize.

Leaders know HR has impressive potential, but few are willing to make this department the profit driver it can be. Moreover, business leaders may be willing, but they’re unsure of how to proceed. Let’s talk about how you can change that.

Hire the right HR people for your business right away

Often, many organizations grab the 1st people they can find that can help them with HR. Or, they may start a small business and outsource HR services to a 3rd-party firm to save money.

That results in not finding the right people to run the human resources department. Like all positions, a warm body is no longer enough. It never has been.

Companies are missing out on critical opportunities for growth and development. HR should work together with finance. Or, choose certain responsibilities for HR to manage.

For example, let’s look at the astronomical cost of onboarding employees. Currently, it costs about $4,700 to onboard a single new hire, according to SHRM.

But what’s your HR team doing to make sure that chunk of change is an investment, and not an expense? That’s where the difference lies.

If you have the right people in HR, they’ll be making the most of every single employee investment. If not, you’ll see high turnover, bad hiring, and other issues that impact productivity and profits.

Integrate HR into other departments of the company

Too often, HR leaders are content to run their departments like a separate entity. They don’t like others poking around. They don’t know sales numbers, marketing and growth strategies, or how their efforts tie into all this.

That leads to a team that feels like they’re separate from the organization. They don’t know how to integrate with the business, let alone support profits.

Enter the business manager. Today, many companies hire a business manager to drive the HR team to success. These people understand the business models, including how HR ties into it all. Managers help companies save on hiring, recruiting, onboarding, and more.

HR isn’t just a standard-issue department. They are an integral part of the organization and if you want your teams to drive profits, you must start at the top.

Get on board with digital HR solutions and tools

Digital adoption should be first on the list. If you haven’t already made this transition, it should be in the works.

Focus on a solution that connects the department to the rest of the organization. That includes integrating digital HR tools with the rest of the company’s tech stack to help move human resources into a more connected role.

Digital HR solutions include:

  • Applicant Tracking Software
  • Payroll Software
  • Performance Management Tracking Tools
  • Learning Management Systems (LMS)
  • Recruitment and Candidate Sourcing Tools
  • Talent Management Systems
  • HRIS (Human Resources Information System)

When you use digital HR tools and platforms, you’ll have access to agile, scalable solutions that can grow with the organization. It’s important to find an exact fit for your needs.

With the digital tools and platforms listed here, the HR team will now integrate seamlessly with everyday business operations.

That means HR will no longer be out in left field doing their own thing. They’ll be at the core of the organization, helping reach business objectives by taking a new approach.

With the digital tools and platforms listed here, the HR team will now integrate seamlessly with everyday business operations. They will also be able to deliver better data and reports to the business manager, who can then help make the necessary connections or changes.

Promote mental health awareness and pay attention to burnout

The pandemic has taught organizations to stop ignoring employee mental health concerns. Companies are seeing more burnout, turnover, and work-related stressors while adopting remote work.

People need to connect and engage with others. The issues created by COVID-19 are genuine and serious, and they’ve dragged a lot of people down — understandably so.

Now is the time for organizations to help people stand back up and reclaim their place in the new world of work. Embrace mental health, time off, and work-life balance.

When an HR team openly acknowledges issues like burnout and the mental health impact of remote work, employees and business leaders alike feel like they can openly discuss their own needs. That kind of security is not easy to come by for today’s employees. If you offer it, they will respond in kind.

That will change the entire conversation surrounding work-life balance and improve company culture. And all it takes is a little acknowledgment from the people who matter most: your HR team.

Ask HR to manage training sessions and more

Getting the HR team engaged and involved with the rest of the organization starts with you. It’s time to find a way to utilize your human resources team for more than just another boring compliance seminar that no one really pays attention to.

Let the team host training and development classes, lunch-and-learn sessions, and let them partner with other department leaders to ensure the hand-off from new hires to onboarded employees goes smoothly.

Not only that, but when your HR team is more connected, the entire organization will run more efficiently. It’ll no longer be a matter of “waiting to hear from HR” or trying to track down just the right person for a question or concern.

Your HR team will no longer feel like a separate entity that just hands you employees and compliance paperwork to sign. That’ll encourage them to do more for the organization, which will lead to an increase in profits down the line.

Those who succeed with HR practices see more revenue growth

Those who’ve succeeded with core HR practices see 3.5 times more revenue growth and more than twice the profit margins of other companies. That same study from HR Magazine noted that skilled HR practices that had the biggest impact on positive performance include:

  • Recruiting and talent management
  • Onboarding
  • Leadership development
  • Employee retention
  • Performance management
  • Employer branding

It’s all about the people. Create a connected workforce that embraces every department and its contribution to the company and the bottom line.

People help make your company profitable. Make sure you have passionate, purposeful employees in your HR department, and you’ll be on the right track.

What’s your biggest 2022 HR challenge that you’d like to resolve

Answer to see the results

Change the culture and watch the conversation change

Perhaps the best thing that organizations can do is to embrace the new world of company culture. Today’s employees want to be a part of something bigger than themselves. They no longer just want to have a job and earn a paycheck.

With this culture shift, the conversation surrounding HR and its role in day-to-day operations will also change. It’s not about reinventing the wheel. It’s about embracing the new business model in a way that helps your HR team become the profit driver that you know it can be.

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