Article No.: 11-12
Article Title: Demonstrating Value as an HR Partner
Author: Linda Gravett, Ph.D., SPHR, CEQC
As 2011 draws to a close, you may be reflecting on how well Human Resources served its role as business partner in your organization this year. Questions you can be asking yourself as a Human Resources professional include:
- Does every person in HR understand the HR Customer Value Proposition?
- Is Human Resources a strategic business partner; that is, are our strategies and practices aligned with changing business needs?
Human Resources can add value by always thinking of and
implementing products or services that provide a significant benefit
to its customers. One of my client organizations recently
added kiosks in private, yet accessible, locations around its
manufacturing facilities so employees can use the computer to access
their personal benefits information. This is convenient for
employees and is a time saver for Benefits staff.
Human Resources can add value by learning the employee capabilities that line managers and executives require to help the organization respond to market demands. The company’s strategic plan can and should serve as the primary needs assessment tool prior to HR initiative development.
Human Resources can add value by serving as a source for competitive advantage. If HR is always seeking to ensure the right people, at the right time, are in the right place, this adds value. A systems approach to recruiting and selection will be necessary to make this happen. One of my client companies fosters a high level of communication between Training and Development staff and Recruiting staff. A typical question that recruiters ask of training and development staff is, “If we recruit and hire at ‘x’ level for ‘y’ position, how will that impact your training and development efforts this year?
As 2011 is ending, I encourage you to assess how strategic the Human Resources function is in your organization. Ask some hard questions, such as, how well is the HR strategy integrated into the corporate strategy; are HR implications considered in each major corporate decision; is an HR report presented at Board meetings at the same level as the company’s financial report; and how business savvy is the entire HR team?
Some steps you can take in the coming year to add value as an HR organization are:
- Participate actively in business planning processes such as new plant or division development
- Understand the issues fully and the implications for
Participate actively on business task forces
These types of activities can develop business and strategic
mastery, as well as increase HR’s credibility across the
organization. Now is a great time to reflect on the roles you
want HR to play in 2012, such as strategic partner, employee
champion, change catalyst and internal consultant.
In summary, Human Resources can add value by supporting the organization’s ongoing quest for competitive advantage; by making it a point to understand its customers’ objectives; and demonstrating how its activities help deliver business results, using worksheets such as the attached Return on Investment analysis. Best wishes for your success in 2012!
EXAMPLE ROI Worksheet
A wellness initiative costs a company $250,000 during its first year of operation. The measured savings from reduced absenteeism is $13,000; from reduced employer health care payments (for a self-funded plan) is $25,000; and from reduced employee turnover is $12,000. The ROI would be calculated as follows:
|BENEFIT TYPE||BENEFIT AMOUNT|
|Reduced Health Care Payments||25,000|
ROI = $50,000 ÷ $250,000 = 20%
Cost of Absenteeism Example:
A company of 150 employees has an average rate of absenteeism for any given day of 2.5% (about 4 employees absent out of 150 employees).
The cost of a sick day is calculated as salary + 30% employer costs divided by 240 working days per year. The average wage is $40,000/year.
The average cost of a sick day is calculated as ($40,000 + $12,000) ÷ 240 = $217/day
$217 x 4 = $868/day x 240 = $208,000/year or $1,387 per employee
If the wellness program impacts absenteeism with a reduction in 17.5%, the savings would be $243 per employee per year.
If you have any questions or need more information about this article, please complete our Contact Form, or contact Dr. Gravett by telephone at 513-753-8870.