Why HR is Intrinsic to Company Growth

Image of the city of london company growth

Author: Dean Hunter

Published: 17th August 2017

There are a number of elements which work together to achieve business growth, and many people don’t realise HR is one of them. The HR department can be a big name corporate player in business strategy, helping employees to relate to business aims and objectives. Effective HR procedures are inherent for business growth, because the main areas HR focuses on – recruitment, talent management, engagement – can all drive profitability.

Many business managers are unaware of how HR can identify cost savings and help get the best out of employees. For example, are you mindful of the cost of disengagement? Do you realise there’s an extra £26bn available for UK businesses to tap into, if they could successfully engage their workforces?

Organisations thrive on their talent, and nurturing it is as important for the bottom line as securing big clients. Here’s how a great HR team can drive profit and push company growth.

Introduce simple cost saving processes

When you think of the role and function of HR, you probably wouldn’t expect profitability to be the first word that comes to mind.

Real leaders understand the impact that sound values can have on the company, and can also correlate great cultures with increases to bottom line profitability.

Most of us will have had a bad HR experience – FACT. No doubt you have had a bad IT one too!

However, when done right, HR strategy drives profits – and the figures from Hunter Adams clients speak for themselves. It can be difficult for managers and business owners to understand just how the HR department relates to the company’s bottom line. After all, it’s not HR associates who are actively selling products or tapping into new markets. Essentially, a good HR team can make the entire company more efficient at what they do – which leads to profitability.

We claim that we are redefining HR by making your company more profitable, here’s the evidence.

Recruitment Spend

Our market mapping, social media presence building and direct sourcing have saved our clients hundreds of thousands of pounds. Traditionally all vacancies would be sent to third party agents and they would be filled as a placement fee or mark up cost. By having a search recruiter map your market sector and fill the roles directly, not only do you build up a pipeline of people who want to join your company but you massively reduce your external third party agency spend and increase the bottom line.

Draining Margin and Profits

We have demonstrated to PLC firms and SMEs that they are draining money every month due to poor productivity. As only 36% of staff are engaged in the UK workplace (CIPD 2017), the costs associated with disengagement can be as much as £650,000 per annum for a company with 100 employees. You won’t see much of this cost on the P&L. But increased sickness cost and the fact that disengaged employees make 100 more errors means your profits dwindle.

Invest in leadership

Having the right leadership team in place is absolutely crucial, which is why HR can assist in identifying the employees with the most potential. Invest in management training to create inspirational leaders which will motivate and inspire their departments.

Boost engagement

HR practices can be used to directly boost profits, and none are more effective than turbocharging engagement. When you create a happy and engaged workforce, staff are more motivated and productive, which has a direct impact on profitability. There are various ways to tackle engagement, but the majority of practices don’t take a lot of investment. That means an ongoing focus on engagement can rack up a very impressive ROI – there’s a reason we talk about engagement a lot!

Tackling disengagement or introducing plans to boost engagement is a simple way of increasing turnover and can be an effective part of a long term HR strategy for growth.

Are you ready to embrace HR as a successful tool for growth? Speak to our HR experts to see how we can implement the fundamental building blocks for business growth. Email [email protected]