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Make HR a Profit Center

December 10, 2009

During a meeting in Chicago this week a great business lesson was clearly illustrated as a client of ours described how their business was thriving because of the “value add” service divisions they have. We were told that the commodity product side of their business had suffered greatly over the last 18 months, but the divisions offering real & quantifiable value were doing great.
What a great & very simple lesson; add value to your client’s experience along the way & they will continue their buying patterns even when things get tough. Take cost & risk out of the conversation by providing value that produces real results.
How can a business 101 lesson like this apply to the HR department? How can an HR department add value to the organization so the department is included in the strategic mission? Who are the clients an HR department serves? Can the value of an HR department be measured and real?
The Answer: have an effective strategy to improve morale, increase engagement, reduce turnover & therefore increase corporate profitability! The primary clients of any HR department are the employees & executives of an organization & data is clear; engaged, happy & loyal employees produce engaged, happy & loyal customers. Engaged, loyal & happy customers is a measurable outcome any executive can get behind.
The HR department has a responsibility to ensure the commodity side of an employee’s experience (comp, benefits, vacation time etc) is more than competitive, but the real value and differentiators come from creating a culture of recognition and appreciation employees won’t be able to find with another employer.
Create that culture and the value of the HR department as a profit center to any organization will be crystal clear.


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