Making HR a profitable department

Many organisations, whether small, medium or large, have always looked at the HR department as a burdensome expense.

Recruitment and selection, training and development, employees' social activities, reward and performance management are all part of the HR important strategy. However, they are a huge expenditure to the organisations.

Understanding that within an organisation each and every employee, from junior level up to management level, is an HR component is the first step to HR profitability. Many HR departents fail and become a burden because they get jammed at the idea of their being a service department.

If there is need to issue a warning, go to the HR department; if there is need to adjust your personal details go and advise the HR department; if it is time for performance appraisals, the HR department will advise when and how to conduct them.

Management the key to helping HR become profitable

Organisations can no longer afford to have management who is unable to take disciplinary action in the right way or does not know how to conduct performance appraisals or just a simple interview, therefore needing constant help from the Human Resources department. This will mean losing time (equals profits) both of the management and the HR division.

Today, an individual in a management position must be completely knowledgeable also with the human resources management skills and not only with the technical things related to his position.

Getting rid of paperwork is the next approach to HR net gaining

This can be achieved with the help of good HR software. Management feel thrilled to have employees update their personal information online. The idea of automating a cumbersome and time-consuming process seemed like a breakthrough that could help revolutionise the HR department.

However, it was one of the first steps towards becoming an electronic human resources department and a better-run company. Spending some time training all employees in all levels how to use the HR software, filling an application, entering and adjusting their personal details, management viewing personal employees files from their desktop, having ready made templates of performance appraisals, disciplinary warnings, policies and procedures, health-care administration and linking HR data to payroll - all helped to slash costs, shredded paperwork and improved its ability to manage data efficiently. In fact, in today's emerging digital economy, HR is quickly becoming a hub for corporate systems and data.

Internet domination will be HR's next conquest

One year's headline is another year's old news. No longer is it good enough to provide employee self-service and migrating to electronic tools. The Internet is the next step to ratchet up the value proposition. For example, an e-procurement system might use HR data to establish rules about authorisations and approvals.

An operations system might access HR data to tweak staffing levels or help a company plan an expansion more effectively. It might also play a central role in designing more efficient production or sales methods.

And what about having an online education and training programme with all kinds of instruction material - classroom, on-site, online, books, videos and CD-ROMs from over a thousand providers? This means that this brave new world requires a different HR department than in the past.

HR should be at the top rank of the organisation asking which systems offer the greatest payback and value, both within HR and for the organisation and which technologies and tools best integrate with the other systems. It is essential that top management running the organisation understands how the various pieces of the enterprise puzzle fit together and that HR is the core of them all.

Take it a step at a time

Dramatic changes are afoot in the way HR users interact with each other and the external buying community, thanks to the evolution of e-business. A good case in point is the online recruiting. Not only is it possible to post a requisition to a system and have it go out to job boards, but it is also relatively easy to tie activities such as reference checking, drafting letters such as letter of appointments, letter of regrets - all without human intervention.

Urging once again

More often than not, this new era of e-HR requires co-operation and effort from all the various departments, and the support of senior management. It means creating task forces and implementation teams, as well as gleaning the expertise of outside consultants.

Despite the many challenges, big companies are proving that e-HR can redefine processes and elevate performance. It also can help transform technology into an asset that boosts the importance and value of human resources. Many HR departments have automated a few specific processes so far. The real gains will come when organisations evolve to a totally electronic workplace.

Consequently, if your human resources department is sinking under the weight of various paperwork and the number of calls from perplexed employees, it is time to start re-engineering your HR.

Different ways that human resources can benefit through electronic systems

¤ Online recruitment eliminates paperwork and speeds the hiring process

¤ Employee self-service automates record-keeping.

¤ Web-accessible knowledge reduces questions to the HR department

¤ Electronic benefits enrolment lets employees sort through options faster, while reducing paperwork and questions for HR.

¤ Linking HR data to payroll cuts costs and makes data more easily accessible, besides eliminating the double information keyed in by HR staff and payroll clerk.

¤ E-procurement eliminates catalogues and manual processes that are expensive and slow.

¤ Online retirement planning helps employees map out their future, while reducing questions and paperwork for HR.

¤ Online learning slashes travel costs and makes training available anytime, anywhere.

¤ Competence management helps an organisation identify strengths and weaknesses.

Ms Zahra is HR consultant with newly established firm Chris Zahra Associates and can be contacted at cza@vol.net.mt.