Emerging role of HR for Business Profitability

Dr. Priya Kalyanasundaram 

Professor

Sankara Institute of Management Science(SIMS)

HR people were rushed off to feet with the directorial and administrative roles, and they once in a blue moon had time to explore tools that could boost their contemporary tasks and effectively make a massive constructive impact on the business success. The scenario continued over the years, and slowly reached a crisis saturation point when companies continually scale up and back, and get flooded with job seekers. This crisis situation have had a big impact on company profits – directly, through lost productivity, longer waits to fill positions, and higher recruiting costs; and indirectly, through lower company market value, reduced employee satisfaction, and poorer company image.

THE HR MACHINERY

One of the vital ways to enhance business effectiveness, promote value, and revenue is to empower HR machinery. In spite of the vast clerical workload, HR senior managers need to explore tools that will assist them coerce efficacies company-wide. This may engross spreading out of the current HR tools. Some first-rate examples of engineered tools that go beyond the nitty-gritty of advantage include the following:

Communication on-net – These tools provide far-fetched ROI, allowing employees to modify their statistic information, apply for time off, review company policy, review job postings and provide for employee suggestions and this results in increased effectiveness, improved the exactness of your data, and high employee morale.

E-Performance – Making it a paperless office, these tools help ensure timely employee performance reviews and provide a documented record of performance data, electronically, which is easily accessible by managers, HR, and senior management. This should be an important part of your risk management efforts.

E-Recruitments – In the down economy, companies were swamped with resumes. In the vast majority of cases, job candidates were ignored, most not even receiving so much as an automated “we have received your resume” e-mail. These candidates may now have a negative view of the company. Consider how they will feel when your recruiter comes knocking at their door in the changing environment, when candidates are harder to find. Among other features, applicant tracking systems, some with Candidate Access Channels, allow job candidates to enter/update their resume information, check the status of their submission, and feel they are getting more attention from your company.

Succession planning – Does your current workforce have the skills to meet future demands? Which employees can cover for key positions? Who is being groomed for management positions? With the retirement of the Baby Boomers in the not too distant future, we expect a huge labor shortfall, both in the number of people available to fill open positions and in the skills they possess. Companies should be looking at expanding skill development and training programs, as well as methods to motivate, reward and retain employees. You need to set strategies and plans for how your company will do business when the bodies aren’t there to fill all the jobs. Succession planning tools can help lay the plans for tomorrow.

Management for Objectives: HR Metrics – The new front line in HR is metrics. Metrics is a tool that allows companies to develop and drive corporate strategies through human capital information. Companies identify, track, and analyze key variables, by job function and business need, to highlight human capital trends and the interaction of key variables. Metrics provides a clear statistical perspective on human capital performance. Taken a step further, it provides a benchmark for management to measure itself against company goals and objectives, as well as industry standards. Further, metrics is presented in a language – numbers – that is easily understood by your CEO, CFO, and senior management throughout the company. Metrics can be implemented at all levels, starting with basic data, such as days to fill, cost per hire, and turnover rate, and progressing to more complex analysis such as employee satisfaction and quality of hires, which might involve a combination of factors and/or formulas to calculate.

Metrics has enormous potential as a business tool to:

• Analyze the impact of your HR programs and initiatives
• Develop HR strategy and align HR programs with corporate goals
• Link performance and compensation for key positions/roles
• Analyze department and company “health”

Compare company metrics to industry metrics. Companies have been slow to adopt metrics, although this tool can really link HR, operations and finance, allowing everyone to talk the same language and plan for the future.