The Human Resources department used to be viewed as a “cost center” and not a “revenue generator.” HR has previously been thought of as an unfortunate necessity rather than a positive force for good.
Luckily, times are changing, and HR is being viewed in a whole new light.
It turns out that the HR department actually plays a critical role in the success of a company. Just break down the name of the department and you’ll understand why. The humans who work in the business are the best resources the company has. Getting those humans to contribute to the bottom line and to the company’s culture is a primary function of HR.
When your HR pros get employees aligned with company objectives, magic happens. Departments become teams. Co-workers become trusted friends. Goals are hit. And the company succeeds.
It’s not Toby vs. Michael anymore.
HR is now a strategic department that the best companies are depending on to fuel growth, attract top talent, develop values and culture, and so much more.
Here are just a few ways that HR can contribute to the revenue of your company.
Build an Attractive Culture
It’s no secret that high-performing individuals directly contribute to a company’s ability to generate revenue.
But how do you get the top talent to come and work for your company? One of the most proven ways to do this is by creating a company culture that attracts these kinds of people. In fact, 46% of job seekers cite company culture as “very important” when choosing to apply to a company.
Job seekers want to go somewhere that feels welcoming and exciting. They want to work for a company that will value their efforts, push them to reach their potential, mentor them to learn new skills, and care about them as a person. This is the type of culture that is built by forward-thinking HR teams whose primary function is to make their workplace great.
People with amazing talent don’t settle for working somewhere they don’t enjoy. HR can win those revenue-generating employees by creating a company culture that they’ll want to be a part of.
Need help hiring and recruiting the most talented people for your company? Eddy makes it easy.
Evaluate and Hire the Best Candidates
Attracting top talent with a great culture isn’t enough to generate revenue if a company can’t spot talent when it walks through the door.
Evaluating hundreds of candidates is a difficult job, and doing it well is critical for company success.
Estimates of what a bad hire costs are all over the place, but the US Department of Labor puts it at more than 30% of the employee’s first-year earnings. These kinds of mistakes add lines to the expense report and detract from the earnings report.
Finding the perfect hire, on the other hand, can be exactly what a company needs to significantly increase its earnings; that’s HR’s job. Good HR tools can help, but expertise and experience increase your chances of success.
Put the Right People in the Right Place
There are barriers to revenue in every company, and one of those barriers is not putting the right people in a position to do their best work. For example, it may seem like your marketers are not creative when they actually just feel unsafe trying something new. Or, you may have a creative genius on your customer success team who doesn’t excel at solving customer problems.
A primary responsibility of the Human Resources department is not only to identify and hire talented people, but to put them in the very best position to succeed.
Sandy Ogg, a senior operating partner at Blackstone spoke about this being a critical problem for businesses to solve as they think more strategically about their employees. He talks about how critical is it to put the right person in the right role. In a recent interview, he said, “The design of the role is as important as the talent you put in it.”
As the designers of roles, HR can see beyond the basic performance evaluation. They can strategically put the right people in the right roles in order to maximize their individual success as well as the company’s success.
Develop a Data-Driven Strategy
The new generation of HR leaders is data-driven. They track metrics, crunch numbers, and make decisions based on their findings. These skills allow HR leaders to be front and center when it comes to determining the strategic direction of the company.
When your company grows rapidly, it’s critical to be able to forecast employee headcount for the next 3-6-12 months. Mess this up and you’ll drop money on the floor. If your company isn’t able to scale with your revenue and customer growth then your success may not last.
A good HR leader will know how to project into the future and will be able to forecast your people’s needs based on historical data, such as voluntary and involuntary employee churn, the average time to hire, the average time to ramp, and the average cost to hire.
With the help of software tools and technology improvements, HR really can make significant contributions to company strategy that will directly impact both top-line revenue, and bottom-line profitability.
Keeping track of HR data can be tricky. Learn why HR professionals are choosing Eddy to manage their processes.
HR may not get it’s deserved attention in strategic conversations, but we’re here to defend the department’s ability to generate revenue!
Here’s to the profession that doesn’t just spend money to solve people’s problems, but earns money by solving the people problems every company faces. Here’s to the profession that generates revenue in numerous ways, even if it’s not in the same, obvious way as the sales or marketing team. Here’s to the department who works tirelessly to build great cultures that attract amazing people. Here’s to HR.