Flipping HR from cost centre to revenue raiser

by Sarah Megginson09 Apr 2014
Often viewed as a cost centre within an organisation, HR needs to effectively partner with the business to help meet growth and profitability targets, in order to shake off its draining reputation and shift into ‘revenue raiser’ mode.
 
If not, “HR will continue to be seen as a cost centre for as long as they focus on HR ­– particularly on transactional HR,” said registered psychologist Steve Johnson, managing director at Transfirmation Partners.
 
“To be seen as a value creator, HR must focus on what makes the business successful,” Johnson explained.
 
“That might be achieved through developing strategic analysis capabilities, improving financial literacy across the business, growing sales capability, or developing the company’s brand and employment value proposition to attract key talent in new markets.”
 
HR could also demonstrate real benefits to the bottom line by stewarding major change initiatives, helping improve efficiency across the business, or simply improving accountability or the ability of managers to lead their teams, he added.
 
“At the higher end, HR can create strategic value by identifying global and regional industry and sector trends, and getting to grips with strategy and how the firm needs to reshape or reinvent itself in order to compete in the future,” Johnson said.
 
Some of the issues worth examining include important yet frequently neglected areas, such as technology strategy, outsourcing options, and real estate strategy; the latter is “often neglected, but has a long and expensive tail”.
 
Future organisational design, global talent strategy, long-term leadership capability and workforce demographics planning are also key.
 
“Understanding business models and product or service lifecycles and profitability is really central to contributing effectively at this level of work,” Johnson said.

COMMENTS

  • by Bruce Jackson 23/04/2014 10:24:05 AM

    HR has a vital role to play in revenue raising for any company. One of the ways this is best achieved is playing an active part in Bids for Tenders. Highlighting key personnel, structures, systems and effective workforce planning particularly in a project delivery environment can potentially score big points in winning new work. Also at the sharp end is ensure that there is a clear understanding of labour rates both internally and externally can also drive a more competitive and accurate Bid proposal. However, none of this achievable unless HR has a good grasp of the operational and strategic intent of the business. Hence, close alignment to operational and line management is the starting point.

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