Human resources is usually known as the department which deals with employee issues and ensures compliance with relevant laws. A good HR team helps keep the business running smoothly and makes sure that your employees are happy..
It's not often thought of as a way to save money, but the correct use of human resources can save you a surprising amount.
Here are some ways HR can help you lower costs:
Happy employees stick around. It costs thousands of dollars to bring on a new employee. The fewer people leave, the less money you spend on hiring, onboarding, and training. Furthermore, you aren't spending working hours reading resumes, doing background checks, conducting interviews, etc. Even writing a good employment ad takes time away from the business.
Low turnover also helps you retain institutional memory and develop and sustain a strong corporate culture that keeps everyone working together and on the same page. There may also be opportunity costs related to the time new employees spend learning rather than working.
A great HR department keeps your employees happy by answering their questions and concerns, mediating in conflicts, and ensuring that everyone's needs are met.
Are your employees going through the motions?
Improved employee engagement benefits companies in a number of areas. It increases productivity, reduces turnover, and decreases the number of safety and quality incidents.
Employees who want to come to work, understand their jobs, and are invested in the success of the organization simply do better work. A good HR department can increase employee engagement by simple, cost effective measures such as improved performance management or employee recognition programs. They can also make sure that new employees understand their job and how they fit in with the organization’s overall plan.
Cutting benefits to cut costs is generally not a good idea. However, some companies may be providing benefits that their employees neither need nor want. A good HR department can identify benefits that can be cut without reducing productivity. Alternatively, they may be able to identify more cost-effective ways to provide the same benefits.
In converse, they can identify when employees are over-utilizing benefits and establish ways to reduce unnecessary use or change how benefits are provided to allow for a higher-than-expected level of usage.
If done properly, you can reduce costs without increasing turnover or lowering morale. You can keep core benefits where they are while looking at whether fringe perks are being used. Ideally, you want to be providing competitive benefits that attract and retain talent, while avoiding feel-good perks that look good on paper but end up not being used in reality.
While nobody wants to be micromanaged, HR can use tools to properly track employee time and ensure it is being used efficiently. One step beyond that is talent management software, which can integrate all parts of the employee life cycle into one system that allows everything to be monitored and improved. This includes learning and development, performance management, compensation management, and both onboarding and succession.
This allows for smooth integration of training on both company and employee goals. A learning management system can help keep employee training on track and provide access to different methods of learning. It can help you establish the real cost of projects as well as spot places where employees could be working more efficiently.
A good HR team can implement this without making your employees feel as if they are rats in a maze. Employee buy-in to talent management is key to its success, and a good team can explain how it will benefit them and their future careers. For example, learning management can help employees develop soft and transferable skills that will come in handy if they want a promotion.
You can also identify top performers and reward them to improve engagement. Systems can be designed to encourage employees to compete with themselves and strive to improve performance continuously.
Saving money is not the primary purpose of human resources, but it's worth identifying areas where your HR team can reduce unnecessary costs.
Ultimately, their primary role is still to ensure that everything related to your employees, from mundane tasks such as processing payroll, to helping an employee make best use of your EAP during a difficult time in their life, runs smoothly. A top HR department ensures that there is no conflict between employees, helps people stay in their jobs even when they have a personal crisis, and promotes your desired corporate culture from the moment of onboarding. They allow business owners and other administrators to focus on tasks key to growing the business, making sales, and satisfying customers.
But all of this also helps keep costs down and productivity up. Ensure that your HR department is doing what they need to do to lower turnover, increase engagement, monitor benefit costs, and bring together gains in efficiency to help your company run smoothly. Satisfied employees mean a productive company that is ready to grow.