The HR Department and Profitability

The role of the Human Resources department is the subject of much discussion in recent years. I've often argued that HR staff belong at the executive table helping with strategy and the business. But, this argument assumes that the HR staff are thoroughly immersed in the business of the organization and the financials.

Too long have people argued that the organization is devaluing the potential of HR staff to contribute. Sure there is some of that in organizations. Many retain a traditional view that HR means administration and error-free transactions.

But, it's the HR department members themselves who need to change this world view. HR staff need to re-educate management and themselves about their potential contribution to the business. Robert Furlong (pictured above) and Kenneth W. Moore (pictured right), discuss this issue and suggest that HR as a profit center would transform the field - and the organization's view of the HR department. Groundwork must be accomplished first.

What would you do if you had an HR employee in 2011 who could improve the company's profit margins, positively impact the cost of goods sold, lower the day's sales outstanding, and increase the price/earning ratio while liquidating overhead costs to the business. Plus, the HR department can make all of these contributions and still deliver flawless transactional and traditional HR services.

Most CEOs would react in two ways:

• Why is this employee wasting his or her time in the HR department?
• Why haven't I demanded enough from the HR department in the past?

Find out more in The Human Resources Department as a Profitability Factor.

_{Images Copyright Robert Furlong and Kenneth W. Moore}

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Source: http://humanresources.about.com/b/2011/08/28/hr-department-and-profitability.htm

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