The HR department tends to have a reputation of the ‘principal’s office’ or the department that doesn’t make the company money. The fact of the matter is if the human resource department isn’t doing anything or delaying things, it can cost the company exponentially more. “For example, when Uber delayed fully investigating its employee’s sexual harassment complaints, the company suffered hundreds of millions of dollars in damage to its shareholder value, product brand, and its recruiting image” as state by Dr. John Sullivan in ‘Understanding the Tremendous Cost of Doing Nothing in HR’. So, in the grand scheme of things, while the HR department may not make a company money by selling goods or services, it can save the company money.
Let’s dive a little deeper on the why and how!
One of the top rules in business is to be competitive in their brand, technology, recruiting, ect. If a business takes a ‘do nothing’ or delayed action approach, how are they staying competitive? An example: a small business has a poor manager causing employees to leave, their production to suffer, or the culture to decline. If nothing is done with this manager, whether it be training or disciplinary, then after a period that small business could easily become a place where no one wants to work. The trickle-down effect of this:
- Employee retention drops
- Recruitment efforts become difficult
- Company brand loses its’ position in the market
- Business declines
If HR took a proactive approach, the damages of a poor manager would be minimal. The question to ask, ‘why we aren’t moving faster in a decision-making process?’
Recruiting and retention are hot topics in the HR world. Can you see how a slow recruitment process can cost the company revenue? Sullivan states an example, “you reduce your time to fill for sales jobs from the 40 days to 30. You will literally gain 10 more days of active selling in each vacant position.” This in turn creates more revenue!
By staying on top of things, HR being proactive versus reactive, they can use a strategic approach to help companies remain competitive. Creating programs, policies and procedures, and not allowing situations to get out of control will ultimately position your company to be a place people want to work and are productive and efficient at work.
Shelly Wallace Johnson, aPHR