10 Role of HR in Cost Management

 

Introduction 

Companies, aiming to enhance profitability, often target HR cost reduction due to its potential for significant savings in the face of increasing financial pressure.

In the quest to reduce HR costs, the focus should be on optimizing processes, enhancing efficiency, and fostering a productive and engaged workforce. This blog post will delve into key strategies for achieving these goals without solely resorting to layoffs or cutting corners.

Assessing Cost by HR

Managing human resources is crucial for organizations, but it comes with various expenses, including salaries, benefits, and training. Companies need to assess these costs to comprehend their impact on the overall financial performance.

Assessing HR costs through Total Cost of Employment (TCE) involves examining salaries, benefits, recruitment, training, and related expenses. This analysis helps companies pinpoint areas of overspending, allowing them to devise cost-cutting strategies without compromising quality or productivity.

Streamlining HR Processes

Streamlining HR processes through automation, particularly with an integrated HR management system (HRMS), is a highly effective strategy for reducing costs. This approach simplifies tasks like onboarding, performance evaluations, and benefits administration, leading to time and money savings, increased accuracy, and enhanced communication between HR and employees.

Robotic Process Automation (RPA) streamlines HR processes by employing software robots for repetitive tasks, such as updating records and generating reports. Successful cases involve reduced administrative costs through HRMS implementation and enhanced efficiency via RPA automation, allowing HR teams to prioritize strategic initiatives.

Outsourcing HR Functions

Outsourcing HR functions can cut costs by tapping into external expertise and technology, enhancing efficiency for companies and resulting in overall savings.

It has drawbacks like HR process control loss and communication issues. By choosing a reputable partner and establishing clear communication channels this risks can be mitigated.

Outsourcing is prevalent across various industries, like healthcare and manufacturing. For instance, healthcare providers may outsource payroll to focus on patient care, while manufacturers might use external agencies for efficient staffing solutions, streamlining their recruitment process.

Employee engagement & retention

Improving employee engagement and retention is a key strategy for reducing HR costs. By keeping employees satisfied and motivated, companies can lower their turnover rates and increase productivity, resulting in significant cost savings.

Boost employee engagement through professional development, including training and mentoring. Foster a positive work environment with collaboration, open communication, and recognition of contributions.

By developing and implementing cost reduction strategies HR play a major role to enhance organizational efficiency and competitiveness in today’s dynamic business context.

References

www.linkedin.com. (n.d.). Cutting Costs, Boosting Profits: HR Strategies That Work. [online] Available at: https://www.linkedin.com/pulse/cutting-costs-boosting-profits-hr-strategies [Accessed 1 Dec. 2023].

AIHR. (2017). How to Measure Human Resource Costs | Human Resource Costing. [online] Available at: https://www.aihr.com/blog/measuring-human-resource-costs-human-resource-costing/.

www.google.com. (n.d.). Title: 7 Tips to Streamline Your Safety Process - EHS Daily Advisor. [online] Available at: https://images.app.goo.gl/ubxGYsBnT6sXzo5f8 [Accessed 1 Dec. 2023].

outsourcinginsight.com. (2016). Outsource HR Function: Streamline Your Business Operations. [online] Available at: https://outsourcinginsight.com/outsource-hr-functions/ [Accessed 2 Dec. 2023].

Ideas. (2019). 10 employee engagement strategies that every manager needs. [online] Available at: https://www.wework.com/ideas/professional-development/management-leadership/employee-engagement-strategies.

09 Succession Planning

 

What is succession planning ?

Succession planning in HR is a strategic process spanning one to three years, preparing individuals for future roles to ensure business continuity. Similar to training a basketball team, it involves educating and developing individuals to seamlessly fill positions in times of disruptions, departures, or promotions.

Importance of succession planning

Succession planning is like preparing a backup plan for your work team. It helps your company get ready for the future, grow well, include diverse talents, and avoid problems in how things get done.

Benefits of succession planning

Filling the talent pipeline with trained individuals brings cost savings, faster hiring, and sustained workflow. It fosters engagement, retention, and higher performance while enabling proactive succession planning, benefiting both the business and individuals by boosting confidence, involvement, and career enhancement.

How does the succession planning process work ?

Succession planning involves identifying key positions, creating profiles for each, nominating potential successors, and developing their skills to prepare for future roles. It’s about strategically managing talent and ensuring a smooth transition when critical positions need to be filled.

Best Practices

•  Objective:      

 Develop a comprehensive succession planning strategy for effective talent management.

• Determining Jobs for Training:

  - Identify critical roles and positions within the organization.

   - Analyze future skill requirements and industry trends.

• Selection of Individuals

  - Evaluate employees based on skills, performance, and potential.

   - Consider a diverse pool for inclusivity.

• Training Materials and Resources

  - Curate or create relevant training content.

   - Utilize online courses, workshops, and mentorship programs.

• Educational Approaches

  - Incorporate blended learning with on-the-job experiences.

  - Utilize classroom sessions, e-learning platforms, and practical assignments.

• Desired Outcome

  - Foster a skilled and adaptable workforce.

  - Ensure a seamless transition for key roles.

• Budget

  - Allocate funds for training resources, tools, and personnel.

  - Consider cost-effective online learning platforms.

• Timeline

  Trial Program - Integrate a smaller pool for experimentation.

    - Gather feedback for improvements.

  Full Implementation - Expand the program based on trial results.

    - Ensure continuous evaluation and adjustments.

• Assessment

  - Establish key metrics for success.

  - Evaluate program effectiveness post-implementation.

  - Solicit feedback from participants for continuous improvement.

How does succession planning improve company culture?

Succession planning is crucial for workplace stability, empowering individuals and enhancing their skills, confidence, and motivation. This investment leads to high-performing, loyal employees, fostering a positive company culture and ensuring sustained growth and productivity.

References

HiBob. (n.d.). What is succession planning? [online] Available at: https://www.hibob.com/hr-glossary/succession-planning.

www.google.com. (n.d.). Title: A winning succession plan should include these 6 strategic moves. [online] Available at:

9 (n.d.). Title: A winning succession plan should include these 6 strategic moves. [online] www.google.com. Available at: https://images.app.goo.gl/RkT8njQh8T1hBbbx5 [Accessed 30 Nov. 2023].

https://www.ist ockphoto.com/photos/succession-planning 

08 Conflict Resolution

 

Human Resource Management (HRM) is crucial for large businesses, playing a vital role beyond conflict resolution. Despite its significance, many people underestimate HR’s functions. Beyond conflict resolution, HR handles various tasks related to interpersonal and intra-personal issues in the workplace, ensuring the smooth functioning of the organization.

Modern corporations, particularly international ones, often face conflicts due to diverse cultural backgrounds among employees. To address this, HR managers should focus on highlighting similarities and utilizing conflict resolution skills. Emphasizing that diversity enriches the team, fostering creativity and positive change, helps employees appreciate differences as strengths rather than hindrances.

A vigilant HR manager anticipates conflicts by understanding team dynamics, identifying tension points, and addressing issues promptly. This involves discerning subtle signs of discord, whether related to work matters or seemingly trivial issues like parking spaces. Proactive communication channels empower employees to express concerns, enabling conflict prevention before escalation.

To foster a healthy team environment, tailor your approach to each unique team. HR should establish trust, encouraging open communication. Enhance the workplace experience by providing entertainment, a cozy kitchen, and opportunities for relaxation. Boosting overall job satisfaction reduces conflict, creating a more harmonious atmosphere.

Handling conflicts in HR requires awareness of various resolution techniques. While each situation is unique, a skilled HR manager can efficiently address conflicts by applying a combination of techniques based on experience and practice. Developing conflict resolution skills is essential, and experience plays a key role in mastering this aspect of HR management.

The HR role extends beyond conflict resolution, encompassing support for personal issues, diverse team management, creating a comfortable work environment, and ensuring overall workplace happiness. These tasks are vital for sustaining efficient business operations, highlighting the crucial but often overlooked role of HR managers in the office.

7 Ways HR Helps in Workplace Conflict

  1. Culture of Open Communication:

     - Encourage transparency and provide channels for employee concerns.

     - Methods: regular team meetings, suggestion boxes, anonymous feedback systems.

  2. Conflict Resolution Policies:

     - HR develops unbiased, accessible policies for prompt and consistent conflict resolution.

  3. Mediation and Facilitation:

     - HR acts as impartial mediators, facilitating dialogue and guiding towards mutual solutions.

  4. Training and Development:

     - Organize workshops on conflict resolution skills, covering active listening, emotional intelligence, negotiation, and problem-solving.

  5. Performance Management and Feedback:

     - HR conducts regular evaluations, provides constructive feedback, and addresses potential areas of conflict proactively

  6. Establishing Grievance Procedures:

     - Formal procedures for conflicts not resolved informally.

     - Impartial investigation and resolution to promote trust.

  7. Continuous Monitoring and Feedback:

     - Ongoing process with consistent monitoring, pulse surveys, and refinement of conflict resolution strategies.

References 

Ong, S. (2023b). 7 Ways HR Helps in Workplace Conflict Resolution. [online] BrioHR. Available at: https://briohr.com/blog/hr-workplace-conflict-resolution/./blog/hr-workplace-conflict-resolution/

Jones, S. (2020b). The Role of HR in Avoiding and Conflict Resolution. [online] Hppy. Available at: https://gethppy.com/employee-engagement/the-role-of-hr-in-researching-avoiding-resolving-conflicts-at-work.

https://image.app.goo.gl/RE6aTLJmJGdWbF7Y8

Limited, A. (n.d.). Conflict Resolution Stock Photo - Alamy. [online] www.alamy.com. Available at: https://www.alamy.com/conflict-resolution-image269552598.html [Accessed 28 Nov. 2023].

07 The Role of HR in Promoting Corporate Social Responsibility

 

In today’s interconnected world, companies with a global presence must prioritize Corporate Social Responsibility (CSR) to respect diverse cultures and foster a social consciousness. Human Resource (HR) departments play a pivotal role in ensuring the adoption and success of CSR initiatives.

1. Implement and Encourage Green Practices:

   - Introduce environmentally friendly practices to reduce the carbon footprint.

   - Examples include recycling, supporting disaster relief efforts, promoting energy conservation, and incentivizing eco-friendly behaviors.

2. Foster a Culture of CSR:

   - HR is instrumental in creating a culture of responsibility and change within the organization.

   - Engage younger, environmentally conscious employees to drive CSR initiatives.

   - Encourage friendly competition and recognition programs.

3. Celebrate CSR Successes:

   - Recognize and celebrate the achievements of CSR programs.

   - Involve company leaders in praising successful initiatives to give them real meaning.

   - Publicize these successes to showcase the company’s commitment to social responsibility.

Three Key Areas of CSR:

   - Community Relations: Implement reward programs, charitable contributions, and community involvement.

   - Training and Development: Connect core products/services with societal values and involve employees in CSR projects.

   - Global CSR Platform: Utilize a global HR Information System (HRIS) to centrally manage and communicate CSR achievements.

Conclusion:

   - A cohesive approach focusing on community relations, training, and a global CSR platform is crucial.

   - A flexible and web-based HRIS is essential for tracking and implementing CSR plans globally.

By integrating these practices, companies can not only enhance their CSR but also improve employee engagement and employer brand recognition. The success of CSR initiatives relies on HR’s proactive management and celebration of achievements.

References 

i-Admin. (n.d.). HR Role in Promoting Corporate Social Responsibility (CSR). [online] Available at: https://www.i-admin.com/blog/hr-role-promoting-corporate-social-responsibility-csr/.

www.google.com. (n.d.). Title: HR- A Force Multiplier in CSR. [online] Available at: https://images.app.goo.gl/pkZMJ8KY25kiv1mG8 [Accessed 28 Nov. 2023].

https://images.app.goo.gl/NQeN4Nw5NKufBFMz8www.google.com. (n.d.). Title: Sustainability Practice Images - Free Download on Freepik. [online] Available at: https://images.app.goo.gl/NQeN4Nw5NKufBFMz8 [Accessed 28 Nov. 2023].

Shutterstock. (n.d.). World Environment Day Global Community Teamwork Stock Photo 2257836925. [online] Available at: https://www.shutterstock.com/image-photo/world-environment-day-global-community-teamwork-2257836925 [Accessed 28 Nov. 2023].

06 Workforce Planning

 

 Workforce planning aims to align organizational strategy with the right number of skilled individuals. Key points to be included.

1. Definition: Workforce planning is a core HR process ensuring the right people with the right skills are in the right place at the right time to achieve organizational objectives.

2. Evolution: It has evolved from a focus on quantitative aspects to a broader scope, covering succession planning, flexible working, and talent management.

3. Link to Business Planning : Workforce planning is integral to business planning, interpreting organizational plans into people requirements and influencing business strategy.

4. Challenges: Difficulties include coping with change, predicting the future accurately, and the need for a stable business environment for effective planning.

5. Reasons for Workforce Planning : It serves substantive, process, and organizational purposes, optimizing resources, confronting the future, and aligning HR plans with business plans.

6. Approach: A systematic approach involves data collection, analysis, scenario planning, and forecasting. Managerial judgment and work study techniques are commonly used.

7. Supply Forecasting: Examines the internal and external supply of personnel, considering existing employees, potential losses, and changes to organizational structure.

8. Ratio-Trend Analysis: Analyzing ratios between activity levels and employees helps determine adjusted numbers needed, considering potential productivity improvements.

In summary, workforce planning has evolved into a strategic process aligned with business objectives, addressing challenges through a systematic approach that includes forecasting, scenario planning, and considering both internal and external supply factors.

Workforce planning chart flow 

References 

Armstrong, M. and Taylor, S. (2014a). Armstrong’s Handbook of Human-resource Management Practice (11th ed.). Human Resource Management International Digest, [online] 18(4). Available at: https://www.academia.edu/32280546/ARMSTRONGS_HANDBOOK_OF_HUMAN_RESOURCE_MANAGEMENT_PRACTICE_i.

https://images.app.goo.gl/eUL7VxzfcJpj3MRLA

05 Employee Development

 What is Employee Development ?

Employee development is an investment in your team’s growth, involving time, effort, and money. While it incurs costs, consider it a long-term gain. Choosing between firing an employee with limited skills and developing those skills may seem like a cost decision, but investing in development yields better retention, enhanced skills, and knowledge. This approach also saves the time and expenses associated with recruiting and on boarding new hires. In fields like IT, where talent is scarce, prioritizing employee development becomes a strategic move for sustained success. Ultimately, a well-organized development strategy aligns your workforce with your business standards, creating a win-win scenario for both employees and the company.

Importance of Employee Development 

Implementing a robust employee training program not only enhances professional skills but also serves as a strategic investment. By prioritizing staff development, businesses foster loyalty, reduce turnover, and capitalize on a well-trained workforce. This approach not only saves on recruitment expenses but also aligns with the notion that specialists value career growth alongside financial rewards. Ultimately, a commitment to employee training reaps long-term benefits for both individuals and the company.

Methods of Professional Development 

1.Mentoring

Mentoring, a key element in employee development plans, pairs less experienced individuals with seasoned professionals to facilitate practical learning. It occurs informally or through formal programs, fostering skill and career growth. Successful mentoring programs set clear goals, demand a minimum time commitment, ensure accountability, align with broader strategies, and contribute to long-term individual and organizational improvement.

2. Coaching 

Coaching is like having a skilled guide (often more experienced) help an individual at work. It’s not just about telling what to do but personalized advice to improve skills and advance in their career. Both the company and the person being coached need to be committed, follow a plan, and assess progress for coaching to be effective.

3. Individual development plans 

An Individual Development Plan (IDP) is like a roadmap for a person’s learning and growth at work. It’s a document where you jot down what you want to learn, how you plan to do it, and what help you might need. Good IDPs use smart strategies for adult learning, hands-on experiences, and other effective methods to help you reach your goals faster.

4. Cross- training 

Cross-training involves broadening employees’ skills beyond their usual tasks, either temporarily or as a structured ongoing process. It may not yield immediate skill development, but treating it as an experiment helps assess employees’ interest in learning. For instance, a frontend developer can temporarily join the backend team to transition into a full stack role, saving the need to hire new developers. Identify required skills for a position, assess current employee skills, and use cross-training to address skill gaps.

5. The 9-box Grid

This tool helps assess employees’ current and future contributions to the business. It uses a grid to spot potential leaders and provides a visual way for managers to understand actual and potential performance. The insights from the grid can then be used to create Individual Development Plans (IDPs).

6. Job Shadowing 

Job shadowing is like a work adventure where one employee spends a day following a co-worker. The cool part? You get to see the job from a different angle, understand challenges in other departments, and if you want to switch roles, it’s like a sneak peek before you dive in. It’s like training for a new job without actually changing your title.

7. Job Enrichment 

Making a job bigger by adding more tasks can boost employee motivation, but it’s not just about quantity. To truly benefit, you also need to make the job more fulfilling and rewarding—this is called job enrichment.

Common challenges 

Implementing employee development plans can face challenges such as managers not being held accountable, a lack of talent development capabilities, misalignment between workforce and business strategy, inconsistent execution of programs, absence of analytics tools to measure effectiveness, and overlooking individualized development needs of employees.

References 

www.primetric.com. (n.d.). What is employee development? Definition and key benefits. [online] Available at: https://www.primetric.com/blog/employee-development-definition-and-key-benefits.

Shutterstock. (n.d.). Business Training Courses Concept Can Use Stock Vector (Royalty Free) 1399287401. [online] Available at: https://www.shutterstock.com/image-vector/business-training-courses-concept-can-use-1399287401 [Accessed 27 Nov. 2023].

04 Performance Management

What is performance management ? 

performance management serves as a strategic approach for supervisors to oversee and assess employees’ contributions. Its primary aim is to cultivate an atmosphere conducive to optimal individual performance, aligning with the overarching goals of the organization. This methodology finds extensive application in both private and public sectors alike. It helps in,

1. Enhances individual performance within organizational objectives.

2. Considers individuals within the larger workplace context, valuing their input in setting goals.

3. Emphasizes accountability and transparency, ensuring clear expectations.

4. Shifts from periodic annual reviews to continuous feedback for ongoing improvement.

Performance management is a formal process fostering alignment between managers and employees regarding expectations, goals, and career development. It integrates with the company’s vision and budget, aiming for an absolute performance standard, though often deemed unattainable. Using tools like goal-setting, it shifts from traditional year-end reviews to a continuous learning approach. This system transforms every employee interaction into a learning opportunity, enabling managers to guide, adjust workflows, and facilitate decisions to aid goal attainment. Emphasizing continuous accountability fosters transparency and communication, reducing workplace stress by providing clarity on expectations and performance standards.

In performance management, customization is key, and universal elements include aligning employees with company goals, defining job duties collaboratively, establishing specific performance outcomes, creating measurable expectations with employee input, developing job-specific plans, and maintaining regular, year-round evaluation meetings between managers and employees.

Benefits

Goal Attainment: Performance management helps organizations achieve their objectives.

Employee Fulfilment: Individual employees find their work more fulfilling through ongoing feedback.

Improved Retention: It contributes to better worker retention by avoiding negative surprises in annual reviews.

Timely Feedback: Continuous feedback throughout the year reduces the impact of annual reviews.

Coaching Approach: Effective performance management encourages managers to act as coaches rather than bosses.7

Encouraging Interactions: Manager-employee interactions become encouraging, engaging, and rewarding.

Customer Satisfaction: Studies indicate that performance management often leads to greater customer satisfaction.

Holistic Perspective: It considers performance beyond individual tasks, promoting a holistic view of employees’ contributions.

Future Trends in performance management 

 Key performance management trends include:

1. Upskilling and Reskilling Employees:

   - 83% of HR professionals face challenges finding skilled candidates.

   - Upskilling and reskilling existing employees is a priority.

   - Strategies include targeted training, rewarding skill acquisition, and experiential learning.

   - Benefits include increased confidence, career advancement, and expanded knowledge.

2. Shift from Annual Reviews:

   - Traditional annual reviews are perceived as unfair and incomplete.

   - Alternative methods include peer feedback, 360-degree assessments, project-based appraisals, continuous feedback, and aligned goal-setting.

   - Diverse evaluations aim to provide a more comprehensive and fair performance assessment.

3. People Analytics:

   - HR leaders emphasize people analytics to understand and optimize employee performance.

   - Analyzing employee data helps uncover trends, reasons for performance outcomes, and future possibilities.

   - Informed decisions are made regarding support and resources to maximize employee potential.

4. Employee Well-being:

   - A top trend in 2023 is prioritizing employee well-being.

   - Addressing core factors of life—career, social, financial, physical, and community—contributes to thriving employees.

   - Supporting well-being through benefits like flexible work arrangements, assistance programs, and mentorship improves engagement and retention.

Embracing these trends can enhance workforce resilience, foster a positive culture, and contribute to overall organizational success.

References 

Tardi, C. (2022). Performance Management. [online] Investopedia. Available at: https://www.investopedia.com/terms/p/performance-management.asp.

Wholley, M. (n.d.). Top 4 Performance Management Trends of 2023 | ClearCompany. [online] blog.clearcompany.com. Available at: https://blog.clearcompany.com/top-performance-management-trends#:~:text=3.-..

www.google.com. (n.d.). images in future trends in performance management - Google Search. [online] Available at: https://www.google.com/search?q=images+in+future+trends+in+performance+management&oq=images+in+future+Trends+&gs_lcrp=EgZjaHJvbWUqBwgBECEYoAEyBggAEEUYOTIHCAEQ [Accessed 26 Nov. 2023].