Does Your HR Department Make a Profit?
Many HR departments do not have formal measures.
The measures they do have are basically performance against budget indicators.
Typically, these measures will include the number of people who have received training, the cost per person, the number of people recruited and the amount spent on projects.
Although these process and cost measures paint a picture of the activities of the HR department, they don't show the results achieved.
The problem lies in the gap between the HR department and real business performance.
What I believe is happened is that the means has become the ends for many of the HR specialists.
Generally speaking, in HR departments that achieve results, the budget is split with 10% being allocated for training needs analysis, 80% on design and delivery and 10% on evaluation of the work carried out.
The measure of success in these organizations is the sustained behavioral change in a specific area with a measurable improvement in business performance.
The objective is clear.
The HR department should be recognizing and measuring deficiencies in behavior.
Then they can design and deliver programs that will effectively produce the desired behavior and have a positive effect on the performance of that sector of the business.
The HR department should be a centre for profit.
It should be a resource that is welcomed by managers and leaders as a means of increasing the performance of their people.
When you start to look at it from this direction, the position of HR is clearly one of being in a service industry.
Their customers are the leaders within the organization and the HR department exists to meet their needs.
To do this, they need to research what their customers want, and what their customers value.
This is the only way that they can be regarded as being in a service industry.
The HR department is there to add value by improving business performance by providing the means to shape and sustain behaviors that deliver success.
Cost/benefit analyses should be carried out on every single training program so that there is a link between the expenditure and the benefit which filters through to the bottom line.
At the moment there is a disconnect between training and profit in most organizations.
Some HR professionals have claimed that it's impossible to measure the results of training.
If that is the case then the training is worthless to the business.
Every single training program should have an objective and a measurable result.
If this is not the case then the training should not take place.
The measures they do have are basically performance against budget indicators.
Typically, these measures will include the number of people who have received training, the cost per person, the number of people recruited and the amount spent on projects.
Although these process and cost measures paint a picture of the activities of the HR department, they don't show the results achieved.
The problem lies in the gap between the HR department and real business performance.
What I believe is happened is that the means has become the ends for many of the HR specialists.
Generally speaking, in HR departments that achieve results, the budget is split with 10% being allocated for training needs analysis, 80% on design and delivery and 10% on evaluation of the work carried out.
The measure of success in these organizations is the sustained behavioral change in a specific area with a measurable improvement in business performance.
The objective is clear.
The HR department should be recognizing and measuring deficiencies in behavior.
Then they can design and deliver programs that will effectively produce the desired behavior and have a positive effect on the performance of that sector of the business.
The HR department should be a centre for profit.
It should be a resource that is welcomed by managers and leaders as a means of increasing the performance of their people.
When you start to look at it from this direction, the position of HR is clearly one of being in a service industry.
Their customers are the leaders within the organization and the HR department exists to meet their needs.
To do this, they need to research what their customers want, and what their customers value.
This is the only way that they can be regarded as being in a service industry.
The HR department is there to add value by improving business performance by providing the means to shape and sustain behaviors that deliver success.
Cost/benefit analyses should be carried out on every single training program so that there is a link between the expenditure and the benefit which filters through to the bottom line.
At the moment there is a disconnect between training and profit in most organizations.
Some HR professionals have claimed that it's impossible to measure the results of training.
If that is the case then the training is worthless to the business.
Every single training program should have an objective and a measurable result.
If this is not the case then the training should not take place.
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