The Difficulties of Showing the Value of the HR Function
April 16th 2021 | Posted by phil scott
HR professionals understand that it’s not always simple to show their value to the business. It’s easy to get left behind when operations and management teams are also competing for resources and financing.
Of course, HR managers know how vital their work is and the value of HR. The challenge is to convey this fact to the senior team.
Doing this is more important now than it has ever been. In many businesses, the financial situation is difficult. So, there is more pressure for different areas of the business to provide concrete evidence of their value.
Why measuring value is more important than ever
The economic impact of the pandemic means that many businesses are struggling financially. From an HR point of view, this means that HR managers are working harder than ever to compete for a portion of the budget and resources. Top professionals know that creating a business case that displays value backed by data is vital.
When presenting this data, it’s not sufficient to simply present numbers, such as recruitment figures. Knowledgeable and experienced HR professionals know that the data they present has to be qualitative and quantitative. They develop reports and proposals that include background information such as how personal development work has improved retention figures. It can be challenging to make these links but combining employee feedback with the numbers, and linking the two, helps HR teams develop in-depth information.
Essential measurements for the HR function
When presenting their business case to the senior team, HR managers understand the measures that are likely to elicit decisions in their favour. With this in mind, essential measures in the HR function include:
- How training-related knowledge is applied rather than merely how much information is retained. For example, how has a training programme led to a reduction in errors or an increase in productivity? Information like this is a better measure of value than simply measuring how much individuals know.
- The effects of advice and support provided. Six monthly surveys within a business provide insight into this measure. Feedback on a case-by-case basis is also valuable. Specific data regarding how assistance has aided with retaining talent for the business and keeping individuals engaged is essential.
- Essential HR-related measures in this area include time to recruit and cost to recruit. These measures help the business understand how HR recruitment processes add value to the business’s operation. Further essential measures around recruitment include the success of recruitment, such as the engagement and retention of high-performing individuals.
- Motivation and engagement. Within this area, useful individual measures include staff turnover and absenteeism, as well as an understanding of the reasons behind the numbers.
- Personal development. Many businesses choose to use measures such as individual personal development plans.
Showing the value of HR can be a challenging exercise. Top HR managers understand the difficulties and ensure that they have systems and metrics in place to enable them to measure the value to cost they provide for the business.