HR, like finance and marketing, are overhead departments — we don’t bring anything into the company monetarily, but we are an expense. And, as such, we’re often the first to go when cost savings are required.
So what is the value of a cost center? What it is and what it should be are often two different things. Value is, of course, determined by the customer. The customer asks, “Do I need this product or service and am I willing to pay the price to have it?” That’s a pretty simple question when the customer makes the buying choice.
In overhead departments however, leadership generally doesn’t have the ability (or nerve) to fire the HR department even if they think HR programs are time consuming or not adding value. In my experience, they complain, refuse to comply and do a really nice job damaging the reputation of the department. Until, that is, their budgets are pinched and overhead is an easy cut — for them.
Adding Value to HR
So how do we make our overhead department truly add value? I think there is a way, but it means moving from compliance-based HR to commitment-based HR. We have to develop products and services that add value, sell the value to our customers, deliver on expectations and build trusting relationships with our customers.
So often we start with the solution, not the problem. We need performance management! Okay, that’s probably true. So HR develops a new performance management program, presents a slide showing the benefits, a little about the process, and begins training and implementation. The first review period rolls around, and the managers are screaming because HR has added hours of busy work to their already overloaded plates.
Let’s look at this as if we had to sell our program to the organization, explain the cost, and compete with other products.
First, what is the value to the customers? Retention of talent and improved performance? These can become empty concepts unless the customer is the one to identify the need.
Try this instead: assemble the leadership and help them visualize the kind of employer that they want to be. Take them back in time to their own significant experiences as employees. How did they learn? Why did they stay with an employer? Why did they leave an employer? What do they want their employees to say about them?
Build a Leadership Team Around Your Vision
Now you’ve got a vision — and the leadership team built the vision themselves.
Now ask them what they are willing to do to create that environment. Are they willing to spend time with the employees? What is the purpose of that time? Learning? Development? How much time does it take to do that?
Now you know their tolerance. And you can push them a bit — do you really think that an employee can grow and learn from just one hour with their manager each year?
You are slowly shifting the product from an HR requirement to a leadership goal. Like any good salesperson, spend time with the managers reminding them of the value proposition they themselves set. And listen to their feedback — chances are there are ways to be responsive to help them do better work.