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Article No.: 11-12

Article Title: Demonstrating Value as an HR Partner

Author: Linda Gravett, Ph.D., SPHR, CEQC

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As 2011 draws to a close, you may be reflecting on how well Human Resources served its role as business partner in your organization this year.  Questions you can be asking yourself as a Human Resources professional include: 

  • Does every person in HR understand the HR Customer Value Proposition? 
  • Is Human Resources a strategic business partner; that is, are our strategies and practices aligned with changing business needs? 

Human Resources can add value by always thinking of and implementing products or services that provide a significant benefit to its customers.  One of my client organizations recently added kiosks in private, yet accessible, locations around its manufacturing facilities so employees can use the computer to access their personal benefits information.  This is convenient for employees and is a time saver for Benefits staff.
 
Human Resources can add value by learning the employee capabilities that line managers and executives require to help the organization respond to market demands.  The company’s strategic plan can and should serve as the primary needs assessment tool prior to HR initiative development. 
 
Human Resources can add value by serving as a source for competitive advantage.  If HR is always seeking to ensure the right people, at the right time, are in the right place, this adds value.  A systems approach to recruiting and selection will be necessary to make this happen.   One of my client companies fosters a high level of communication between Training and Development staff and Recruiting staff.  A typical question that recruiters ask of training and development staff is, “If we recruit and hire at ‘x’ level for ‘y’ position, how will that impact your training and development efforts this year?
 
As 2011 is ending, I encourage you to assess how strategic the Human Resources function is in your organization.  Ask some hard questions, such as, how well is the HR strategy integrated into the corporate strategy; are HR implications considered in each major corporate decision; is an HR report presented at Board meetings at the same level as the company’s financial report; and how business savvy is the entire HR team?
 
Some steps you can take in the coming year to add value as an HR organization are: 

  • Participate actively in business planning processes such as new plant or division development 
  • Understand the issues fully and the implications for employee development
    Participate actively on business task forces 

These types of activities can develop business and strategic mastery, as well as increase HR’s credibility across the organization.  Now is a great time to reflect on the roles you want HR to play in 2012, such as strategic partner, employee champion, change catalyst and internal consultant.
 
In summary, Human Resources can add value by supporting the organization’s ongoing quest for competitive advantage; by making it a point to understand its customers’ objectives; and demonstrating how its activities help deliver business results, using worksheets such as the attached Return on Investment analysis.  Best wishes for your success in 2012!

 
                                  EXAMPLE ROI Worksheet
                                        Wellness Initiative
 
A wellness initiative costs a company $250,000 during its first year of operation.  The measured savings from reduced absenteeism is $13,000; from reduced employer health care payments (for a self-funded plan) is $25,000; and from reduced employee turnover is $12,000.  The ROI would be calculated as follows:

BENEFIT TYPEBENEFIT AMOUNT
Reduced Absenteeism$13,000
Reduced Health Care Payments25,000
Reduced Turnover12,000
Total Benefits$50,000

ROI = $50,000 ÷ $250,000 = 20%

Cost of Absenteeism Example:
 
A company of 150 employees has an average rate of absenteeism for any given day of 2.5% (about 4 employees absent out of 150 employees).
 
The cost of a sick day is calculated as salary + 30% employer costs divided by 240 working days per year.  The average wage is $40,000/year.
 
The average cost of a sick day is calculated as ($40,000 + $12,000) ÷ 240 = $217/day
 
          $217 x 4 = $868/day x 240 = $208,000/year or $1,387 per employee
 
If the wellness program impacts absenteeism with a reduction in 17.5%, the savings would be $243 per employee per year.

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If you have questions about this article, don’t hesitate to contact Dr. Gravett at lsg@justthebasics.com.  Or, use our contact form by clicking here

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