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How does HR add value?

How does HR add value?
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HR is often overlooked and undervalued in a lot of companies. Because HR is not a revenue-generating role, a lot of businesses choose to outsource HR, or do away with it entirely, in order to save money. What these businesses fail to understand is that HR brings its own value to any company that will increase revenue through means other than directly increasing sales or customers.

The HR role is often understood as a position that is simply there for handling paperwork to do with staff, payroll, hiring, firing, and handling conflict resolution. But HR was originally created as a position that strengthened companies from within, looking out for the best interests of the business by ensuring both management and workers were happy and treated fairly. The adage that “a happy worker is a hard worker” originally came through HR thought and development and has changed the way a lot of successful businesses treat their staff – including companies like Google who had a profit of over $180 billion in 2020.

There are different ways the HR role brings value to different businesses. It will largely come down to what management enables HR to do and how much of a part HR has in daily operation and decisions. When an HR executive is treated as an administrator and expected to only handle paperwork then there is little sense in keeping them on because they are not being treated or utilised in a way that suits their skills. But when the HR position is recognised as valuable and the HR executive is given more freedom to use specific HR skills, that is when companies will see their staff thriving and revenue increasing.

 

What does HR do?

The best place to start when questioning the value of HR is by looking at what HR executives are actually trained to do. A skilled and qualified HR member will be able to perform the administrative tasks mentioned above, but they will also be adept at handling more intricate, nuanced, and complex tasks that make a difference to the way staff view the company and therefore treat their work.

The HR executive is the go-between for all the people in the company (giving them the title of “human” resource executive). Their communication skills should be outstanding, and they should be able to easily empathise, negotiate, and encourage people in the business on all levels. As the intermediary between management and workers, they are also responsible for making sure both parties feel heard and understood. Complaints and concerns can be passed through HR to ensure that the best outcome is found, and heightened emotions don’t interfere with business decisions.

At the heart of HR is an understanding of the business. It is the HR executive’s responsibility to know, understand, and promote the values and priorities of the business. With this understanding, the HR executive is able to communicate with managers, stakeholders, and staff to boost morale and encourage confidence in the company. By making the people involved in the company feel heard and understood and communicating the company goals, HR can improve job satisfaction. Studies have shown that workers who are satisfied in their jobs are 13% more productive than their unhappy or apathetic counterparts.

A fully rounded HR executive will be able to oversee the full life-cycle of all employees, as well as perform all the necessary paperwork that goes with it. The basic role will include:

  • Recruitment, including researching competing organisations, advertising the position, helping in the selection of candidates, assisting in interviews, and drawing up contracts
  • Hiring, including management of training and onboarding.
  • Payroll, PAYE calculations, and benefits
  • Handling of complaints
  • Conflict management and resolution
  • Health and safety, including procurement of necessary equipment and training on proper health and safety within the workplace
  • Upholding employee rights
  • Promoting continues professional development and personal growth
  • Managing general office morale and motivation and ensuring unity and a job satisfaction
  • Promoting business values and priorities
  • Handling disciplinary action with the intention of best possible outcomes for both the business and the employee involved
  • Firing and handling resignations, transfers, and retiring staff.

 

How does HR add value?

Staffing

Hiring the right team for your business can be difficult. Especially now, any vacancy will be faced with floods of applications and it can be difficult to work out who will be the best fit. The best employee is also not necessarily the one who looks best on paper. Employees need to fit the company culture, have a good rapport with supervisors and other staff members, be motivated by company values, and have the right credentials.

Staffing is largely the responsibility of HR and the right HR executive will be able to identify new staff who will add to the company. Through proper production of recruitment material, including job descriptions, and through strong interviewing and screening processes, your company will be better equipped with the right candidate for the job.

During the staffing process, your HR team will also do research into competitor businesses to assess competing salaries and benefits. Having this kind of knowledge helps your business attract a higher calibre of worker. The right research will also allow your HR department to know where to find the right talent. Some jobs are better advertised online while some are better advertised on university campuses – your HR department will identify the kind of person who is right for the job and where they do their job searches, so that you are drawing from the optimum talent pool while building your team.

 

Performance

The long-term success of a business usually links directly to the staff. Staff need to have the right qualifications and experience, but they also need to have the right motivation, stimulation, and interest. Most staff will interact with the customer in some way, whether it is directly, or through research or administration. This means that the company is represented by each member of staff who has any dealings with the public.

The HR role is imperative here because they will perform regular checks to analyse the health of the company – not using financials or deliverables, but by looking at the people. By identifying where there are problems in motivation, teamwork, or stimulation, the HR department can make recommendations to management on behalf of the staff.

Team-building exercises, continued professional development (CPD) courses, office facelifts, and other benefits or perks are all ways to address problems facing the people in the office. By offering incentives like CPD, flexible hours, or team days, HR can find ways to train and develop skills and interests in employees and reward good results or attitudes.

When staff feel valued enough to be invested in, their job satisfaction goes up and so does their productivity. As job satisfaction improves, employee-customer relationships improve too.

 

Legal Advice

Part of the HR role that is often overlooked is their role in staying up to date on workers rights, health and safety laws, and other business legalities. Because laws can change frequently and other departments need to stay focused on their tasks without trying to stay current with any changes, the HR department picks up the responsibility and helps the business stay protected from lawsuits.

Through their knowledge and ongoing interest in business legal requirements, HR teams can help to eliminate the risk of lawsuits from potential employees, employees, and customers. This could take the form of:

  • Maintaining a fair and non-discriminatory hiring and firing process
  • Following the correct channels for disciplinary hearings and retrenchments
  • Setting limits on numbers of hours worked and other workplace laws and employee rights
  • Establishing processes and training for proper health and safety in the workplace
  • Staying vigilant for workplace bullying or inappropriate behaviour
  • Data handling of sensitive information for both employees and customers
  • Keeping insurance documents up to date to cover business needs
  • Providing ongoing training where necessary for the job, such as first aid

 

Long-term planning and strategic thinking

Most HR executives are strategists at heart and have a knack for identifying potential problems, brainstorming solutions, and coming up with strategies to improve business models. This mindset is the reason many HR roles are part of a management team. When HR participates in strategic planning, their value increases for the company.

Within a strategic planning environment, a good HR executive will prove themselves through assessments of the company with insights into both the business and the staff, projections of future opportunities and potential threats, and suggestions for successful business growth. When HR has a voice in management, changing human resource needs can be addressed early to avoid staff turnover, conflicts, or a decrease in productivity brought on by poor human resource management.

All strategic outcomes are brought about by people, so it is vital in planning to be thinking about the people in your organisation and how new strategies or changes will influence them and vice versa. HR is the department responsible for training, supporting, and equipping the staff who will ultimately implement new strategies. A person who understands the people within the business as well as the business goals is indispensable in getting staff on board for any changes.

If you have been considering outsourcing HR, remember that an outsourced HR executive will not have the knowledge and insights into your company and staff that an in-house HR employee has. You will lose the valuable input from an expert by failing to keep an HR executive on staff.

 

Employee Positioning

Within most businesses, jobs change. This can happen either intentionally or unintentionally. Roles may transform over time as the needs of the business change, or you may find that an employee naturally shifts roles or responsibilities based on skills or interests. This is not a bad thing if the change is intentional and handled well, however, badly handled job transformations can be problematic for business.

Without an active HR presence, businesses are likely to find themselves in one of two positions:

  1. Staff will stagnate and roles will become restrictive and prohibitive. There will be limited room for growth for staff which also means limited growth for the company. Staff turnover is likely to increase because employees are not being challenged or encouraged to use different skills and interests.
  2. Roles will become too fluid and certain jobs will start to get neglected. There will be too much freedom for staff to adapt their job roles or challenge themselves and the business will suffer because the jobs that are perceived as boring will likely go undone. There may be great ideas, but there won’t be a strong enough foundation within the staff to implement them and see company growth.

A proactive HR department will see where jobs need to be developed and where people need to be challenged or trained. It makes a lot more sense for people to be moved and have their roles expanded within a company than it does to hire someone new, but it takes a trained HR person to identify needs and find creative ways to fill gaps.

Some of the benefits for your business of internal growth are:

  • Engaged employees who have an expectation of job development and a positive career trajectory, resulting in better productivity, creativity, and enthusiasm
  • Save money on unnecessary recruitment by using people within the business who already understand the business
  • Creative development that allows the business to naturally grow into gaps in the market
  • Identification of unnecessary or outdated procedures that can then be removed to ensure more streamlined work
  • Happier workers which results in happier customers and managers
  • Planned progression which prevents important jobs from being neglected while employees are trying new areas of interest
  • Improved job satisfaction which makes your company more attractive to future employees and allows you to draw from a wider talent pool for future recruitment

This shift is not automatic, but if you trust your HR team, they can be invaluable in bringing about these changes in your business. HR can efficiently and successfully rebuild business processes, redesign organisational structures, map and model competencies for better job matches, and strategise long-term development plans.

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