Too Many CFOs Still Don’t Believe HR Impacts the Bottom Line… Here’s Why They’re Wrong

Scroll down to read more!

Too Many CFOs Still Don’t Believe HR Impacts the Bottom Line… Here’s Why They’re Wrong

Scroll down to read more!

Table of Contents

A recent study found that the majority of CFOs (61 percent) say they don’t believe that HR impacts the bottom line, and shockingly, almost half of my HR peers agree. But with employee turnover costing US companies more than $600 billion in 2018, it’s clear that there is real business value in optimizing your talent management process to motivate your workforce and retain your best and brightest workers.

In too many organizations, HR is still viewed as a defensive function that exists to protect the business from its own employees. This stance shows up in outdated HR technology and practices that are built for compliance, rather than for proactively helping managers and employees align their work to top business priorities and actually improve their performance.

Ideally HR teams should be viewed as the powerplant that fuels business growth and innovation through activities including: performance management and employee development, building a feedback culture and securing the organization’s future with a strong leadership pipeline.

HR Combats Costly Turnover and Builds Talent Pipelines

This may come as a shock, but nearly half of all businesses don’t actually track what it costs them to recruit, hire and onboard new employees. Not having this critical data leads many business leaders to underestimate how much turnover is truly costing the business.

In order to lower turnover rates and avoid the loss of institutional knowledge and relationships, HR teams need to deploy a performance management process that keeps managers and employees talking about development and their careers within their current organizations. Key to this is shifting away from backward-looking annual evaluations towards a development-focused employee experience anchored in more frequent conversations between managers and their reports.

This continuous approach to performance management facilitates constant realignment around top business priorities and motivation of the entire workforce to achieve desired business outcomes. Combined with tech-driven innovations such as advanced analytics capabilities, HR teams that have adopted modern performance management practices like these are seeing the benefits of having up-to-the-moment insights about their talent to inform strategic activities like succession planning, retention, and building their leadership pipeline.

HR is Responsible for Creating an Engaging Employee Experience that Drives Needed Business Outcomes

Particularly for millennial employees, who now make up nearly half of the workforce, company culture is a major determining factor in their career choices. To that end, crafting an employee experience that fuels sustained motivation is one of HRs most critical responsibilities.  The essential factors in motivation include: a sense of purpose through alignment on top company priorities, career development, and regular, crucial conversations around feedback from both managers and peers. These aren’t ‘nice-to-haves;’ engaged teams show 21 percent greater profitability, 17 percent higher productivity, and 10 percent higher customer ratings compared to disengaged teams.

In order for HR to deliver the needed employee experience, technology plays a major role. Today’s workforce expects their technology – even HR tech – to be intuitive and integrated seamlessly into their flow of work. Industry analyst Josh Bersin calls this “Employee Services Layer” the single most important technology investment HR can make.

When managers and employees are aligned around goals and business priorities, and equipped with the tools they need to make their conversations worthwhile for feedback and career development, companies ensure their long-term competitive advantage. HR is no longer a reactive or compliance-focused function – its role has evolved into a key player in corporate growth and innovation. It’s time for CFOs and leaders across organizations to view investments in HR not as a cost center but an opportunity to maximize the value of a company’s most important asset – its people.

Did you like this post? Share it!

A Word From Our Sponsors

Ads help make Workology resources free for everyone. We respect your privacy. To see our Privacy Policy click here.

Recommended Posts

Sanjay Sathé, Founder & CEO of SucceedSmart, is no stranger to disrupting established industries.

Q&A With Sanjay Sathé, Founder & CEO of SucceedSmart

This interview is part of a series on Workology that features an HR Technology company, its founder and its features. For this post, we’re...

supporting caregivers: the sandwich generation at work

Supporting Caregivers: The ‘Sandwich Generation’ at Work

I’ve been told my whole life to enjoy being young and to grow old gracefully. To enjoy and soak in every moment, especially the...

Recruiting Reimagined: How Specialized Software Strengthens Hiring in 2024

Explore how specialized software is transforming recruitment strategies in 2024. We discuss the benefits of innovative tools for hiring....

How to Reduce Stress at Work (and Life) with Meditation

We can’t always limit stress or the amount of it in our lives, but we can arm ourselves with resources and tools to help...
Best HR Certification prep books

Best HR Certification Prep Books for SHRM and HRCI

Looking for additional reading to support your study prep for HRCI or SHRM? We've got a comprehensive list for you right here....
Your Global HR Certification: A Professional's Guide

Your Global HR Certification: A Professional’s Guide

Elevate your HR career with our guide to Global HR Certification. Explore benefits, prep tips, and vital resources for exam success!...

Resources for Session Attendees of Digitizing Talent

Resources for conference session attendees of Digitizing Talent: Creative Strategies for the Digital Recruiting Age....

Ways to Set up Self-Paced Studies in Higher Education

In the world of higher education, the winds of change are blowing. More than ever, students are looking for learning options that fit their...

Checkout Our Products

Ads help make Workology resources free for everyone. We respect your privacy. To see our Privacy Policy click here.

More From Workology

Ways to Set up Self-Paced Studies in Higher Education

Click on read more to open this post on our blog.

Resources for Session Attendees of Digitizing Talent

Resources for conference session attendees of Digitizing Talent: Creative Strategies for the Digital Recruiting Age.
Your Global HR Certification: A Professional's Guide

Your Global HR Certification: A Professional’s Guide

Elevate your HR career with our guide to Global HR Certification. Explore benefits, prep tips, and vital resources for exam success!
Best HR Certification prep books

Best HR Certification Prep Books for SHRM and HRCI

Looking for additional reading to support your study prep for HRCI or SHRM? We've got a comprehensive list for you right here.