Alot of companies and organizations are now learning to realise that HR is a very very important division or an add-value entity in determining a company’s profit and loss. Profit and loss; for example:
"A research conducted by an international recruitment company estimates that it costs a company one-third of a new hire's annual salary to replace an employee. Using an average salary or RM 2, 400.00 per month, it would cost a company RM9600 to replace each departing employee. Estimates of the cost to replace supervisory, technical, and management personnel run from 50 percent to several hundred percent of their salaries".
Basically when one employee leaves, the exuberant amount of dollars that has to be spent hiring another employee costs a lot, in fact three times!. A lot of people do not see this, but consider these factors:
Time: Employee leaves the company today and if their skills are too niche it could be three months until another employee comes on board. Project duration could be push back due to lack of manpower, big deals could be lost or you might need to pay headhunters to perform search services for faster recruitment :).
Re-training: Unlike sales professionals who could come onboard today and be on the phone planning meetings for tomorrow, technical professionals have to be settled in. The new employee needs more training, has start compiling all documents such as user requirements or project timeline, had to get use to new settings, certifications etc.
Scarcity: This is pretty much the same as time, but good competent employees do not come too easily, there is a lot of demand at the moment and supply is limited.
Model of working: No two people work the same way hence the new employee has to adapt to the current culture so does the manager and the rest of the team.
The list can go on. To my surprise, especially reading a lot of articles and magazines, I realized that there has been more emphasis on HR. Retaining and retraining employees. There has been a lot of focus on Human Resources Departments as an asset that helps to improve total overall business and organization structure.
Having worked in HR for a few years, the halo effect that I have gotten is 'HR is just an administrative tool' for a company. Payroll, induction administration, staff activities, medical administration and so on. It is just an administrative office.
Lately, which I am happy about, a lot of companies top management are now collaborating with the HR team in determining retention strategies, induction of young competent graduates, creating a environmental friendly awareness outside and inside the organization, obtaining relevant important information and feedback from the HR Department. At the end of the day, people make an organization what they are. Human resources planning has become a business tool to make the overall structure of a company strong. HR personnel’s are the first point of contact for new fresh recruits. The first impression for new recruits starts from the HR department. If you like an administration tool, there are always HRMS systems out there to be bought, but not the human touch.
How would you know whether your staff in your company is generally happy with the overall structure? The best way to go about obtaining this information is through surveys. I believe a survey is a highly effective model of change management. It is highly impossible to get accurate feedback if a survey is given by your boss, in this scenario HR department although always seem to work in the best interest of the company, should always act neutral when it comes to matters like this. This is just one way of heading towards change management.
I am very glad to see the way forward on how a lot of companies are depending on their Human Resource functions to be an asset and not just an administrative department of a company.
HR soon enough will be a Strategic Human Capital management tool that will help an organization to obtain success and help build a high performing work culture.