When Rubber Meets Road, is HR Impacting the Bottom Line?

Long in existence is the myth that HR is little more than a group of boring cubicle-tethered individual’s responsible for doling out pay checks, calling references and handling a hodge-podge of other hardly recognized administrative tasks.  Yet the reality is that HR should actually be the nuts and bolts of even the largest corporations, strategically providing the workforce from which success is derived.  Unfortunately, the current HR status of firms throughout the country and around the globe is somewhere between these two extremes. The question is why.

Part of the problem is that HR is frequently turned into the brother’s uncle’s second cousin twice removed version of itself when adopting too stringent a focus on policies and paperwork and, consequently, losing sight of the bigger picture at hand.  While procedures have their place, this myopic view causes HR to suffer a serious case of shortsightedness.  Founder of ROI Institute, Dr. Jack Phillips, added “HR needs to be so well connected that we understand the operational issues….and the challenges ahead.”

Likewise, this hyper-focused behavior creates an inherent disconnect between HR and the rest of the organization. Paul Kearns, a director of strategic HR consultancy firm PWL, suggests that HR departments are frequently “taken off the ball of the strategic stuff,” and that “it’s time for senior HR execs to maybe stop looking at the process and refocus on the impact of these things.” In essence, HR needs to re-up its prescription glasses and stop building fences to reconnect with the entire organization.  In doing so, HR will offer a stronger foundation from which the rest of the organization may build upon.

However, in addition to adopting a new framework through which to view their purpose, HR also needs to get on board with the trends of today.  When it comes to the metrics HR relies on, there’s a fair amount of irrelevance.  Professor of Business at University of Michigan’s Law School of Business Dave Ulrich affirmed this idea; “I think one of the biggest challenges of HR metrics is measuring what is easy and not what is right.” HR needs to get back to basics.  What’s being measured in pre employment testing and why?  How can the results be effectively presented and utilized?

In this way, HR has the opportunity to demonstrate its value in an undisputable fashion, yet it frequently falls flat, offering analytical reports that do little to admonish the myth we initially spoke of. Phillips elaborated on this unfortunate truth: “HR execs don’t have the data that says, ‘Hey, we’re investing here, and it’s making a difference right here in this organization, on this particular project.” In doing so, they’re completely missing out on a potentially critical step, especially in the eyes of executives. Phillips adds, “HR can’t gain respect unless we show the value as other colleagues in the organization do.” Yet, during such economic turmoil, can any individual or department afford to take its place within an organization for granted?

The reality is that corporations, like never before, must call upon HR to act diligently and with an eye on the future. HR, in turn, must implement practices that improve their intra-organizational awareness and more clearly demonstrate their value. With any luck such actions will not only improve the productivity and financial standing of business throughout the nation, but will also finally put to rest the lackluster reputation of HR.

Is your HR Department really impacting the bottom line? Share your thoughts below.