Important Message from HR to CEO

Successful business without quality HR? Impossible. However, only minimum CEOs identify it as a key department for company growth. The potential of HR remains untapped in many companies. That’s a pity. A company is based on people and no one knows more about them than HR.

So, if your boss sees you just as an assistant who prints contracts or puts up ads, it’s time to open his eyes and show him that HR kicks for business. How? Maybe by using our challenge of five messages- we wrote them down for all HR departments that have to fight with their CEO on daily basis.

1)Prejudice reduction

They do paperwork, don’t care about data, with employees they only deal with a card and keys during onboarding or returning them when they leave, they are not educated… There are many prejudices about HR and it’s a big mistake if you believe them. HR is particularly a strategic department that works with data every single day. Thanks to the knowledge of labour market data and the ability to analyse company numbers, HR can for example find out why employee turnover occurs and what strategy can be used to reverse it effectively.

People are a company’s biggest expense and it would be a mistake to see them as just items and numbers in a spreadsheet when making strategic decisions. HR can identify people in your team who will support your new project or are willing to take on new tasks, as well as crisis point where you have to support your employees so you won’t lose them.

According to SHRM, the average cost of a new employee is about $4,700 (CZK 113,000). Other experts report that the cost of hiring a new employee could be three times the salary of the given position.

My experience in the service segment is that when all expenses (hidden expenses included) are honestly accounted for, it can be five times as much. Actually, any cost matters. Especially in a situation when a person leaves your company after six months and with no value added…

What numbers does HR generate that can help your business?

• How many employees are dissatisfied in the long term
• Who is interested in education
• Work efficiency and time management
• Cost per employee
• Benefits appreciated by employees
• Atmosphere within the company
• Employee loyalty
• How attractive the company is to prospective employees

Of course, they will be pleased to provide you with further information if you’re interested.

The more you invest in digitizing and acquiring a quality HRIS, the more data you will have for decision- making. Then the process of making decisions will be easier, more data- driven and not skimped.

Action steps:

• Find out to what extent your HR is digitized and what data it works with
• Make a list of data you would like to know
• Agree with HR on what data they should send you and how often

2) Check the condition of your HR

When was the last time you visited HR office? Do you know what they are struggling with? Do you know if employees and colleagues within department are satisfied with its work?

McKinsey research shows that even if CEOs see human resources as a priority, the HR manager is only about the eighth or ninth most important person in the company. What about in your company?

HR is the entrance point of the company. Each employee experiences it. The condition of the department and the atmosphere there can have an impact on other processes. There’s nothing worse than the situation when good candidates are likely to get discouraged by zero onboarding and confusing communication between departments; or when an overworked HR person, tired of filling out paper forms and taking leaves, has no opportunity to offer employees any benefits or development and has no time for one-to-one interviews.

When gathering information about your HR department, you should remember education of HR people. HR processes should reflect the leadership style of the company. If you highlight progress, innovation, adaptability and positive employee motivation, it’s important that the HR department supports this “enlightened thinking” as well. Otherwise, instead of acting like gas it will act more like a brake and its contribution to the company’s profitability will be minimal. Ensure that HR is in touch with trends and news within the field. Encourage HR to attend conferences and training courses.

Be interested. It’s for the sake of the company.

Action steps:

• Get feedback from HR department (do it on behalf of a newcomer, a veteran employee, direct colleagues)
• Go through all processes with HR to see where they might need your help
• Identify weaknesses and propose solutions (training courses, investment in HRIS, sharing information across departments)

3) Clean the air and be a mediator

Build trust in HR within the company. Maybe it’s not you but somebody else who is biased against HR. Maybe collaboration doesn’t work as well as it should among some colleagues. The economics department may not be satisfied with the form in which HR sends the payroll documents. The ads for new positions don’t reach the right target audience because the marketing department refuses to help HR with promotion.

How to detect tension among the departments? Notice how they communicate with each other in meetings, observe project team collaboration and how long each process takes (it usually takes longer if there is no collaboration). Of course, the easiest way how to identify a problem is when a colleague confides it directly to you. You can also try a standard questionnaire and get feedback in an organized way.

If there is a problem, listen to both sides, plan a meeting, take the role of a mediator and clear the air. Together, discuss how things have been working so far and use for example a simple SWOT analysis to identify the weaknesses and strengths of cooperation or the possibilities for improvement.

HR is the department that is often between a rock and a hard place. On one hand, it’s influenced by the company management; on the other hand, by the employees. The financial department cuts its operating budget and employee benefits. Then it’s impossible to take care about the employees on certain quality level because of reduced spending. HR sometimes needs support or at least a third- party perspective to help clarify friction points.

Action steps:

• Identify the problem- listen to both sides separately
• Arrange meeting of both parties and conduct a SWOT analysis
• Propose a solution

4) Cooperate and communicate

Cooperation is a strength. You can move your company forward if you pull together and the left hand knows what the right hand is doing. The key is information sharing, regular meetings and well-coordinated communication with employees. And above all- trust. Without it, there will be no motivation and no desire to move things forward.

Involve HR in management and let it show what they can achieve. You can get a range of benefits. When the management wants to communicate changes, HR will provide the data to see if the team is ready for them and doesn’t threaten to leave. It’s extremely difficult situation when your own employees go against you. When the budget is on the agenda, HR will provide the data about the costs of hiring 50 new employees or on the contrary about the costs of layoff. There are many other possibilities- the HR department is the right one to describe them.

The role of HR is to do their best to move the company forward but never lose sight of the employees’ needs.

They won’t be your mouthpiece but a professional partner who- when given the opportunity and the tools- will provide useful information about the company from different point of view that you might overlook.

And their knowledge gained from previous companies may be helpful- after all, your company certainly isn’t the first company where your HR person has handled the HR agenda.

Action steps:

• Review with HR what information and from which departments could be useful for them
• Identify the processes that shouldn’t lack HR representation
• In cooperation with other departments, agree to share information or attend meetings together

5) Invest in HR

The financial department often clips HR’s wings. The CFO’s vice is to see everything, including people, through the spreadsheets. It’s not completely wrong, he just needs also those from HR.  Incorporating fintech recruiters into the talent acquisition strategy can bridge the gap between financial planning and human resource management. He doesn’t always have the right data to make meaningful changes to, for example, employee costs so unsuccessful cuts can bring less money than expected. Man is an expense item but we have to count on him for the future. So, this expense has to be meaningful and human as well.

For example, investment in the activities that increase employee participation and engagement may seem to be unnecessary expenses in a spreadsheet but actually they can lead to savings.

Gallup reports that companies with the highest level of employee engagement are 17% more productive and 21% more profitable than the companies with lower level of engagement.

Moreover, the unemployment rate has been below 4% for the last three years and there is a lack of quality employees. It means only one thing- rather than mindlessly fire the employees and then look for dream experienced colleagues willing to continue learning who would be also great mates, it’s more beneficial to invest in your own people. And no one can help you more than HR in this situation.

For the millennial generation, establishing in the labour market now, it’s a commonplace. For 93% of them, the availability of professional development is the most important factor when deciding about the job. If you want to maintain employee productivity and also the productivity of the company itself, providing opportunities for qualification growth is a must. It won’t be such a difficult task, if you invest in HR.

Action steps:

• Analyse expenses on HR
• Calculate how much it costs to layoff an employee and recruit new staff
• Evaluate, together with HR, what activities and services are key to employee satisfaction and determine if they cost finally less than layoffs and recruitment