Reporting your HR accomplishments to the top brass isn’t enough to cement your role as a strategic partner in your organization. It’s just as important to quantify the financial impact of those accomplishments.
“Be able to articulate what you do as it relates to the bottom line, not how happy it makes the employees,” advised Sue Meisinger, former CEO of the Society for Human Resource(SHRM) at a recent SHRM conference.
Advice: First, determine which regularly reported HR activities your top executives consider most crucial. Then create and implement programs to improve those activities in ways that increase revenue or profit, or cut expenses. Finally, develop credible metrics to measure the financial impact of HR activities.
Here are three examples:
Example 1: Orientation. Say your department took several steps over the past year to improve the orientation process and make it more efficient. As a result, turnover declined and new employees spend less time in orientation, enabling them to start work sooner.
Financial impact: HR conducted 30 employee orientations since making the process more efficient a year ago. During that period, turnover decreased by 10%, saving the company about $16,000 in hiring costs. New employees spent 25% less time in orientation, adding 90 hours worked. Managers report 20% fewer mistakes made by new hires in the first month.
Example 2: Safety. Say you launched a safety education program a year ago. Since then, the number of accidents, safety violations and injury-related days off have declined.
Financial impact: Accidents, injuries and incidents last year fell from 40 to 25. Injury-related days off decreased from 70 to 30, saving the company $8,400 in paid time off.
Example 3: Turnover. Six months ago, HR took several steps to reduce turnover. The department replaced the pre-company, implemented job skill and temperament tests, and standardized exit interview questions. It also started a low-cost staff recognition program.
Financial impact: Turnover and cost per hire decreased by 15% over the past six months, saving the company $29,000 in recruiting and administrative costs.
Bottom line: Unless you can back up HR gains with clear, verifiable numbers, you risk weakening your credibility with management.
Online resource: It’s vital that your HR initiatives are also priorities for your CEO and exec staff. How do you know what’s important to them? Read “Show how HR helps forward the big boss’s goals.”