By David Brown, General Manager
Gone are the days when Human Resources (HR) was seen as the soft, fluffy administrative area designed specifically to carry out each and every manager’s wishes.
As business has become more complex, the workforce more diverse and demanding and the regulatory environment more complex, human resources has been recognised as a key driver of business.
However, many still don’t fully appreciate just how great HR impacts on any organisation. So let’s dive in and look at how human resources management can drive business success.
The Human Resources Management Service Ladder
Whether you have an internal HR consultant or an external outsourced HR service such as Employee Matters, there are three levels at which the service can operate:
- Fixing problems
- Preventing problems recurring
- Improving and driving value in the organisation
Fixing
This is the more traditional view of HR as being there to ‘fix’ people issues. ‘Someone isn’t performing; HR consultant please come in and fix it for me’.
While this transactional view of HR is still an important part of your HR consultant’s role, it can be refined to ‘HR consultant, please help me fix this.’ Nevertheless, this is the minimum we should expect from our HR advisory services.
Preventing
The issue with the reactive ‘Fix’ approach is that the organisation is stuck in solving the same problem again and again, wasting valuable energy, time and money in the process, especially when the fix results in visits to Fair Work or paying out ex employees!
Your astute human resources consulting service will look at this situation and examine the root cause, devising a process or strategy to ensure the issue can be avoided in the future.
This is a step forward but is still largely transactional; viewing your people as ‘liabilities to be minimised’ rather than ‘assets to be cultivated.’
Improving and Driving Value
This is where Great HR kicks in. The truism that ‘Our people our our greatest asset’ is heard a lot and can often be dismissed as some kind of marketing platitude. But the irony is that it is true! Your people are one of, if not the most expensive part of your organisation and also have the greatest impact on its success.
Great HR consultants recognise this and seek to create ‘Employee Assets’ to drive the success of your organisation though your people and not in spite of them.
Let's take a look at how this is done.
The elements of Great HR
So how does a great HR service create Employee Assets? At Employee Matters we believe it is by:
- Seeing the people in your business as the treasured asset that truly drives your success
- Leveraging that treasure using a holistic HR strategy to align that treasure to your organisation's strategy
Take a look at our Employee Asset Model to understand how this works. We take a 3:3x3 approach …
Looking at the ‘Drivers’ of your business success we have identified three:
- Profit
- Growth
- Sustainability
To achieve these we have three HR ‘Levers’ for success:
- Performance
- Culture
- Risk Management
Each of these levers has 3 ‘Accelerators’, which is where your HR strategy is operationalised.
In this way, your HR consultant aligns every aspect of your proactive HR strategy with your business goals.
Measuring the ROI on your HR Service
Traditionally, when it has come to return on investment, people have seen HR as something that is unquantifiable. A lot of that outdated opinion comes from this idea that HR can’t be measured.
These days, this is far from being the case, especially now HR information systems (HRIS) are basically affordable for almost every business and Artificial Intelligence (AI) is really coming of age.
Whether it’s great all round services such as those from ELMO or Employment Hero, or more specialised services from businesses like Culture Amp, our ability to measure the effect of great HR on business services is becoming easier almost by the day.
What Should We Measure?
Start with the HR Strategy developed from the Employee Asset Model. Focus on the priorities in the plan so you can quickly begin to see the impact of your HR plan on the business. Here are a few areas to get you started:
- Level of engagement
- Cost of attrition
- Time to hire
- Cost of replacement
- Lost time injury frequency
- Level of role competency
There are many more which a great HR information system will help you explore.
Summary
HR has come a long way in the last thirty years and Great HR delivered by a great HR consultancy service can have a measurable impact on your success. It’s time to think about your Human Resources Consultant as a driver of that success and not just a reactive problem solver.
More than anything, it's time to see your employees as not as Liabilities to be minimised but as Assets you can grow.
