Your human resources: a profit center!
Increase profits by recruiting the best talents
Everyone is familiar with the statistic “Replacing a productive employee costs 0.5 to 2 times the employee’s annual salary”. What’s more, according to a study conducted by the CHRP organization, 50% of recruitment mistakes can be attributed to a poor job description, an inadequate selection process or non-equipped managers. Ka-ching! Ka-ching! $$$$
Increase profits by reducing absenteeism
According to Statistics Canada, employee absenteeism costs employers an average of 15% to 20% of their annual payroll. Again, according to Statistics Canada, in Québec, full-time employees missed an average of 9 days of work for personal reasons in 2010. This, of course, does not include absences for maternity or parental leave. And I won’t traumatize you by talking about a new phenomenon that is even more costly: presenteeism! Ka-ching! Ka-ching! $$$$.
Group insurance constitutes another significant cost centre. If you have a lot of workplace disabilities, if a negative work environment is causing mental health problems in your staff, your insurance company is going to have a lot of claims to deal with. And since most employers pay part of the insurance, this has a direct impact on your profit margin.
Do you still think your human resources service is a cost center?
For years I have been telling my former employers, and now my clients, that there is ONLY ONE profit center in their business: their human resources service. You need to surround yourself with HR management specialists who are able to calculate the return on investment of every program you put into place. They have to keep you up to date on staff turnover rates, absenteeism rates, training costs, hiring costs, etc. Finally, they need to be able to effectively coach and guide your managers when it comes to choosing the best talent, retaining employees and managing team performance.
Invite your human resources management team to contribute to your next annual planning cycle by setting up an action plan to reduce the costs associated with poor human resources management: you are sure to come out a winner!
Annie Lebeau, CRHA
Capital GRH Inc.