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 may go under the radar in many business guides and business books, but in reality HR has a big part to play for steady and successful company growth.
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, and engagement.
Introduce simple cost saving processes
Let’s take a look at these areas in more detail:
When it comes to growing your business, recruitment is going to take centre-stage. Yes, you may be lucky enough to one of those companies that gets many speculative applications, but for most businesses recruitment is an active process with plenty of two-way communication. A good HR will not only write a powerful job advertisement, but they’ll know exactly where and when to promote it too. They’ll also manage the application, saving managers time from time-wasters, unqualified or inexperienced applications. Their role in recruitment makes the process easier and more efficient, which means growth can happen faster.
Talent management is important, because it’s crucial to keep you staff (talent) happy. Talent management isn’t just about attracting new talent, it’s also about retaining your current talent and ensuring their job satisfaction is high. Replacing key members of staff is expensive and time consuming, so a good HR will know when any staff might be a flight risk, and will aim to notify managers to ensure this is prevented. The culmination of this saves time, resources and can increase profit down the line – all which leads to increased company growth.
A good HR will ensure that staff are always engaged and interested in the business and their role within it. It may fall under your HR’s responsibilities to manage any incentive schemes, and it could also fall under HR to plan and organise parties, training and team days. All these things count towards staff engagement and staff happiness – which inevitably affects costs, profits and the bottom line. The better these three key things are performing, the quicker company growth can be.
How can you identify cost savings?
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. Most people would assume HR roles focus around culture and people-management. 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.
If you’re looking to include HR in budget discussions, get them involved from the outset. They may have insights into cost-saving that you’re not expecting, and they may have ideas on how to save budget in certain areas too. One of the interesting things about HR is that they’re often a point of call for many people in the business, so their exposure to different pressure points is high. This offers them a unique insight.
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.
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. A HR team could help monitor this, and ensure repeat offenders are investigated.
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.
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 firstname.lastname@example.org