![]() It is also incumbent on managers and leaders to involve HR in critical business discussions and decisions. ![]() The relationship between finance and HR is also critical and both teams should be pulling in the same direction. The use of people data and analytics will enable business leaders to identify, analyse and report on significant workforce issues early and plan for future workforce requirements.įor HR to demonstrate tangible benefit to the organisation, they must first understand the business they are in. The use of automation to streamline processes and provide autonomy and ownership back to employees and their people leaders will drive efficiency, productivity and improve engagement. The irony of this fact is stark given the significant cost of labour and its impact on the bottom line. Human Resources functions have been slow to utilise the power of data and analytics. HUMAN RESOURCES WILL PROVIDE CRITICAL UPDATES SERIALThe recent example of payroll non-compliance and serial underpayment of employees is a good case in point. Similarly, non-compliance with employment laws if discovered can be costly and time consuming. If high performance is not recognised, this can have a significant impact on engagement. When non-performance is not addressed it can have serious impacts on the rest of the workforce. However, employee performance is important to productivity and the bottom line. Significant time and effort has gone into complex and usually ineffective performance management processes and systems. The implications for hiring, engaging and developing talent are significant. This should be front and centre in the HR plan and strategy. Deloitte report that the right response to addressing the shift in skills required can deliver a $36bn economic windfall. More than 80% of jobs created between now and 2030 will be for knowledge workers. ![]() Research by Hay Group suggested revenues could be as much as 4.5 times higher for those companies with an engaged workforce than those without.Īustralia is facing major skills shortages. There has been much research on the causal link between employee engagement and the bottom line. An article by US talent solutions company, Apollo Technical report poor hires are estimated to cost 30% of the employee’s salary in the first year and as much as US$240,00 per person, in lost productivity and the expenses of hiring, retention and pay. The talent strategy needs to align to the business strategy and the people hired need to align to the culture and purpose of the organisation. HR has a critical role to play in targeting, attracting and retaining the very best talent for an organisation. people can make or break a business and therefore, shouldn’t HR be taking a lead role in managing the financial and other implications of those people?Įffective human resources practices are critical to productivity. However HR can be done well, and when it is, it can have a significant impact on overall workforce effectiveness and a positive effect on the bottom line. Rarely will they be seen to have a good grasp of critical financial metrics. All too often HR is seen as either soft and fluffy – developing and implementing programs that no one sees the benefit of, or process and policy police, with little ability to adapt to the needs of the organisation and the workforce. So why isn’t HR in this discussion? Unfortunately, HR still has a credibility problem. It would be rare indeed for the HR function to be seen to have a direct impact on the bottom line (except perhaps as a cost to be managed), let alone lead the conversation regarding the cost of labour and the financial implications of same. Yet the conversations regarding labour costs and the bottom line are usually led by the CFO and finance department or other functions seen to have a direct impact on revenue or financial performance, for example, sales. In the June 2021 quarter, the Australian Bureau of Statistics reported Australian organisations spent $295,373 million on labour costs. ![]() The biggest cost of doing business is usually labour. ![]()
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