The Human Resources department of any organization plays an important role. It recruits and trains new employees, keeps current employee up to date on the latest information they need to know, manages benefits, and helps managers provide the tools they need to supervise and review their current employees.
But one thing HR rarely does is contribute to the financial success of the company. In many — if not most – organizations, it is seen as an administrative department rather than a profit center. And in many businesses, the leaders of the HR department are often at odds with the leaders of other, more profitable departments because they lack a fundamental understanding about the way the business operates.
Many HR departments do a great job of telling managers what they can and can’t do, but they do a poor job of helping the company increases its profits and earnings.
In other words, HR may understand what a business needs, but it doesn’t always get what the business wants. Perhaps that’s the main reason why HR leaders rarely make the leap to the CEO position.
Starting Over with HR
Maybe it’s time that business leaders took another approach to the role HR plays within an organization. Many of the functions the department traditionally performs – managing employee benefits, training and certification, assisting in employee evaluations and reviews – can now either be automated or handed over to online or video training.
In practically every industry, businesses are facing stiffer competition. Everyone – from the board room to the production line or delivery van – needs to make adjustments in order to thrive in this new environment. So why should HR departments be allowed to continue what it’s been doing for decades? Shouldn’t HR leaders also be held more accountable for contributing more to the bottom line?
How to Change
One way to change attitudes is to change perspectives. HR workers tend to spend their entire careers in the same department. They bounce around from one area of expertise to another – such as the training, benefits, compensation, development departments – without ever seeing what it’s like in the trenches.
One way to make HR more responsive and creative is to bring in new people from other departments and dispatch existing HR employees into front line positions – at least temporarily. Having your benefits administrator spend a quarter managing a department that’s responsible for earning a profit not only will give them a fresh perspective on what they normally do, but it also can spark change in operations by bringing in a new set of eyes.
Separate Talent Acquisition
Generally, HR plays two roles in an organization: It handles important administrative matters such as benefits and support services. And it is responsible for strategic talent management. Of these, the latter has a much bigger impact on a company’s profitability than the former. So why not break this out into a separate department that can focus on such important things as the effectiveness of the organization, and the sustainability of the business model design?
Understanding what a company truly needs in terms of key personnel gives HR leaders more of an insight into what makes a company succeed rather than fail. And by devoting more time identifying the best talent and less time worrying about the functional day to day details of supervising employees and tending to administrative tasks, your HR leaders can finally contribute to the profitability of your enterprise.
The topography of the business environment has changed. Technology, increased competition, and new attitudes requires everybody at every level to make adjustments. It’s finally time for HR to follow suit by taking a more versatile approach to their role within the organization and embracing the type of change that will add to the company’s profitability and success.