Hi!
Here goes the popular statement in the corporate world that 'HR is a cost center'. I am sure most of the HR professionals would agree to it. Atleast my research says that.
Recently a VP HR mentioned, But HR is a cost center, isn't it?
The word BUT gave me a feeling that HR professionals have more or less convinced themselves that indeed, HR is a cost center.
How many of us have passionately felt that HR is a profit center?
Yes you heard me right HR is a profit center unless we provide the same with factual Data.
During my recent visit to US to meet the Jack Phillips team, I realised that in US, HR professionals are THE HR Professionals and command credibility. Unlike here where HR people are more of coordinators rather than Strategic decision makers.
The answer is simple - we ourselves are to be blamed. I remember in my earlier organsiation my boss used to frequently mention the job of a HR is to cut cost. I failed to understand if cost needs to be cut then hire auditors why HR personnel.
Like the Legendary CEO of GE Jack Welch was named Neutron Jack as he believed in Cut cost and grow. Cutting cost was not the essence, the essence was to not only cut cost but grow. And grow exponentially. Its history, A truly task oriented yet a peoples person, Welch took GE to new heights.
HR people need to have that deep earning towards results.
Below is an excerpts from my research interview with a VP HR from a Multinational company
Me: Do you do training in your company
VP HR: Yes we do and we invest around 30 lakhs per year in training technical as well as behavioural.
Me: Oh that is nice. How do you know that the training has impacted.
VP HR: We definitely take the Kirkpatrick's model. We do take the reactions post training to understand how the training was, the trainer's knowledge.
Me: But that is only the reaction level in the Kirkpatrick's model. How does the reaction measure the impact for which the training was conducted.
VP HR: We can see the impact.
ME: How do you measure it?
VP HR: We donot measure it. Infact there is no need to measure it. It is visbile.
ME: That is nice. But how do you prove to the management that the training was justified.
VP HR: QUIET
VP HR: I get what you are saying.
ME: Absolutely no data means no impact. Unless you are able to support your impact claims with data it doesnot make sense.
Look at finance and sales professionals why can they claim that they are the drivers of the company.
VP HR: I know because the numbers speak for themselves.
ME: Now you got the point. So to claim an impact HR professionals need to back up any process or training implementation with numbers.
So my friends, post this interview the VP HR realised the value of data and the need to make HR a profit center.
Currently we have two models of ROI running successfully the first Kirkpatrick's Model and the second Phillips Model. However, there is a significant difference in both of them. My favourite is the Philips model as it is more practical to implement
It is extremely vital to prove HR as a profit center. So next time you are implementing a process or an intervention or a training, begin with the end in mind.
Ask the question to yourself How can I quantify the results? Don't just be satisfied with reaction and learning level.
For that setting quantified objectives is the key...
If you have any queries you can mail us on contactus@exponentialadvisory.co.in
Till then think how you can make HR a profit center...
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