Introduction
To find out how HR Helps the Company Make Money, I interviewed David Sotnik an HR generalist at Schneider Electric. Schneider Electric headquarter is in France and serves worldwide, they specialize in electric and energy management, technology along with software and hardware services. As of this year it employees 144,001 that are located all around the world such as USA, MX, AUS, CA, and many more.
How HR Helps the Company Make Money Key Points
The human resources functional area of the organization fosters the achievement of improved financial performance through the following ways Recruitment and selection of appropriately qualified, skilled, and talented employees Provide focused training and capability development for employees from across the organization Promote good employee relations and engagement rates within the organization Job, task, and process or workflow analysis Risk assessment and promoting compliance within the organization with all the legal requirements The human resources department in the organization is primarily responsible, working with the other departments of the organization, for the identification, recruitment, and selection of properly qualified, skilled, competent, and talented employees. The statement that personnel resources are one of the most important assets of an organization, may have become a clich, but the importance of qualified, skilled, competent, and talented employees to the attainment of organizational goals and objectives cannot be emphasized enough.
According to the interview, the ability of an organization to attract and retain high quality employees is a key determinant of the levels of success achieved by the organization. Such employees can engage in specific activities, such as foster innovation, and exhibit good performance that promotes the achievement of organizational goals and objectives. By undertaking this function effectively, the human resources department ensures that the organization has at its disposal skilled and talented employees in management, leadership, and other operational positions, capable of performing their duties competently to contribute in specific ways, in their respective departments, to the achievement of organizational goals and objectives. Further, the human resources department in the organization, in partnership with the other departments, continuously conducts training and capability development for the employees from the other departments and for employees within the personnel management department itself.
The human resources department, working with other departments within the organization such as sales, operations, and production, as well as external consultants where necessary develops and implements a training program and curricula that mitigates skills obsoleteness and ensures that employees have the required skills to perform their jobs effectively. Accordingly, through such programs, the human resources department fosters the productivity of individuals, teams, and the organization in general. For example, providing training to the sales and commercial department has enabled the organization to address negative variances in projected sales quotas against actual sales performance, which has increased the revenues of the business over the years.
Most of the training provided has been focused training, aimed at addressing specific skills or performance discrepancies, which has generally enhanced organizational performance, which translates to improved revenues and cost management and containment, and an improvement in profitability. In addition, working with other departments as a business partner, the personnel management department has been developing and implementing different strategies aimed at fostering employee relations, engagement, and satisfaction levels. According to the interview, high turnover rates in the organization can be detrimental to the performance of the organization through increased costs because of the high costs associated with high turnover rates as well as rehiring new employees for the vacant positions.
As such, the formulation and implementation of different initiatives aimed at improving employee relations, engagement, satisfaction levels, as well as loyalty and commitment to the organization has fostered cost management within the organization. Accordingly, through improved employee relations, engagement, satisfaction and commitment to the organization, there is improved productivity, and containment of costs, which ultimately contributes to improved financial performance of the organization. Another important way in which the human resources management department in the organization contributes to improved financial performance of the business is job, task, and process or workflow analysis.
Through these specific activities and initiatives, according to the interview, the human resources management departments, working with other departments, such as the production department, have been able to assess and identify sources of waste and inefficiencies. Premised on the results of such assessment, specific strategies to foster productivity and reduce waste have enabled the organization to realize its revenues goals, as well as mitigate escalating costs and generally improve profitability of the organization. Further, from job analysis and workflow analysis, the human resources department provides an understanding of the specific processes within an organization, as well as the skills and competencies required for the positions therein, which has also improved the organizations personnel recruitment, selection, and retention agenda.
In addition, within the department itself, various activities are analyzed multiple times, and in line with the organizational goals and objectives, all initiatives such as recruitment, selection, remuneration, promotions, employee relations, are done in consideration of the financial impact of the activities, which has ensured effective cost management. On the other hand, the personnel management department, in partnership with the other departments, undertakes risk assessment and formulates and implements specific actions or initiatives aimed at promoting compliance within the organization with all the legal requirements. Risk assessment, according to the interview, entails all activities that identify different types of vulnerabilities and susceptibilities, which if not addressed could result in direct financial losses, or indirect financial losses, such as reputational losses.
Premised on a risk assessment report, the organization can formulate and implement strategies that mitigate such risks and ensure continuous good performance, productivity, increased revenues, and lower costs of doing business. Moreover, from such an understanding, especially for the legal and regulatory risks, the human resources department ensures compliance with the laws of the land. The interview observed that litigation costs, as well as fines, emanating from legal risks susceptibilities could be a very large expense for the business, and ensuring compliance with stipulations such as under Occupational Safety and Health Administration (OSHA) regulations, will lower the cost of doing business and improve the profitability of the business.
Concluding Comments The human resources management department, as is the case for all departments in an organization, has to ensure that its particular activities, goals, and objectives, are aligned to the overall strategic direction of the business. Further, the department, to foster the achievement of not only its goals and objectives, but the other departments and the organization in general, works closely with the other departments of the organization, to formulate and implement specific activities that foster productivity, performance, improved revenues, and cost management and containment.
While, unlike the sales and commercial department that engages in selling to generate revenues, the human resources department does not engage in similar activities that directly bring in revenues to the business, its activities in general, will foster the realization of good financial performance of the business, through enhanced productivity and performance. At the same time, its activities will foster cost management and containment within the department itself and the organization in general, which is integral to the pursuit of profitability and financial performance goals of the business. Reflecting and looking back on the interview, I feel that most of the theoretical concepts covered in class so far, are very applicable in the real world, and in many ways, contribute to the achievement of organizational goals and objectives, and more particularly, the financial performance goals and objectives.
