HR Should Be a Profit Center - bettHR

Even when I was doing my most strategic HR work, I still felt like I was constantly busy and not sure I was making a real impact. Every employee questions if they are adding value to the organization and their life. But, when I found myself questioning the impact of my everyday activities or worse, my annual goals, it was time to reevaluate… everything.

When I joined HR, it was from a different department – I was working in Communications and Marketing at the time, and was used to having to account for every single dollar we spent and how it furthered our product goals. But as soon as I moved into HR, I noticed that I didn’t have to create the same level of detail for our spend.

We had things like sponsored SHRM memberships and CEB Council memberships… that were available to us, but not tracked or studied. We could attend HR-related events and trainings… without having to share what was learned. Employee engagement surveys and follow-up actions were executed year-after-year. And so on.

HR was a profit taker.

And most HR departments are still profit takers.

When the CEO (ok, I really mean the Finance person) looks at the annual budget allocations, HR is usually left to the end and then cut in half. Year after year.

And HR is left trying to keep doing what they did last year and add another thing on top, with less money and perhaps, an unbalanced workforce.

Why does HR always get the shaft?

You know as well as I do, that our past spending habits and reputation of being a “soft-skills” department has left us with a huge hurdle to constantly overcome. And yet, hardly any HR departments have shifted their mindset (and spending habits) into one from being a cost center, into being a profit center.

It seems difficult on the surface.

Didn’t we all just radically change our HR model from being onsite “helpers” into different Centers of Excellence and areas of expertise so we can be more strategic? Aren’t we teaching our leaders how to lead better with automated online HR portals, so we can get out of the daily administration business?

Weren’t these solutions to be THE answer to bring us to the next iteration of HR? The strategic partner platform…

So what happened? Why are we still profit takers? Why do we still get asked time after time, what we’re doing to best utilize the money we spend?

The steps we’ve taken – becoming more specialized, stepping back from the daily paper pushing, creating processes, and so on… are part of the way we can add continuous value to the company’s bottom line. But it’s not an automatic switch ensuring our success.

It’s phase one and phase two.

But these phases do not accomplish the important goal: being more than just a drain on the organization’s bottom line.

The critical phase, the one that you likely think is too hard to pull off, takes less time and money than any other solution you’ve already implemented…

… it’s creating meaningful measurements around what you’re doing. What you plan to do. What you spend your budget on. What your company cares about. What your employees need and want.

You can’t become a true profit center, until you start thinking like any other profit center. Where’s your budget going… and why? Where is the ROI for your spend? Does your spend and the results, match with the company’s positioning and value proposition?

You can start doing this easily. Just start here.