This is an excerpt from a conversation I had with a friend of mine over some beers after work one day.
Me, “So let me get this straight. Your company does over $100m in sales, with over 250 full-time employees, another 100 or so temporary employees, and no one in the role of Human Resources? Why not?”
My friend, “Well, that’s just adding more overhead with no real value.”
Aside from the strong desire to push her off of her bar stool, I had to let her know how wrong her thinking really was. I wish I could say that this is the first time I’ve heard this excuse from an executive as to why they don’t have an HR presence in their organizations, but alas, it isn’t. I also acknowledge the truth that in most cases, human resources is a cost center. There really are no positions that traditionally fall under that category that are revenue generating, unless you include recruiting. But to say we add no real value to an organization is just plain wrong.
HR: The Cost Savers
A big part of HR is making sure you stay compliant. That includes things like I-9’s, EEO and OSHA reports, as well as affirmative action plans. Making sure those reports are done properly is the different between ICE issuing you a citation for thousands and thousand of dollars or walking away with nothing. I’ve seen some businesses close from fines assessed by government agencies for things that could have so easily been prevented had an experienced HR person been retained.
HR: The Cost Reducer
Do you know how much you pay in state or federal unemployment tax? Did you even know that amount could be lowered? A seasoned HR person can provide regular training to supervisors and managers and coach them on employee relations issues. Their job is to know your company policies and work with the managers to protect the organization. Proper documentation on disciplinary issues can mean the difference in winning or losing an unemployment claim. The more claims you win, the lower your taxes, the bigger your bottom line.
HR: The Strategic Partner
Is your organization growing? How are you going to fill the positions you need to hire? Do you have a talent acquisition plan? How’s your brand and ability to attract the talent you need? What if you got hit by a bus tomorrow, who would take your place? Do you have a succession plan? If it seems like I’m pelting you with questions, I am, but I’m trying to prove a point. Helping you grow is also part of what HR does. They can help brand you better to attract the talent you need. They can help you find and/or groom your replacement so when the time comes for you to retire, the organization won’t fall apart. They network and recruit constantly, so they are connected with top talent for your industry. They also effect change management within your organization and facilitate communications.
Your most valuable asset is your workforce. They are also your biggest cost. Why on earth wouldn’t you put an HR person in place to help you manage it? What you think you’re saving in salary and benefits, may end up costing you in fines, lawsuits and the ability to attract the talent you need.
So tell me again how you don’t think HR is of value?
The Rant 