Human Resources Improves your Company’s P&L!
Most people who are not in Human Resources look at this function in a few different ways. It is the department that hires and fires people, the team that ensures your company has benefits and holiday parties. They are the team that we go to with our problems. I, too, viewed HR this way for many years, mainly when I worked in Corporate America.
While working at BOOST, I‘ve had an epiphany of sorts. HR professionals help companies remain profitable! They tirelessly work to drive organizational change and keep a company compliant with the ever-changing laws, including federal, state, and local regulations, Government Contracting obligations, employee benefit requirements, and even the new trend in COUNTY level paid time off regulations. That’s right; it is not only the states that make laws that are prematurely making our HR team turn gray, but many counties also have additional paid time off regulations. Add all that to the tight labor market, and our HR professionals are more critical than ever!
If you want to ensure you maintain more of your company’s profits on your P&L, here are a few areas to focus on with HR professionals:
- Culture – Employees want to work at and be a part of companies with encouraging, enjoyable, and supportive cultures. HR can transform company culture only if the entire C-Suite is part of the process and buys in completely.
- Benefits – One of the top 3 reasons employees leave a company is poor benefit offerings. Make sure your benefits are not only competitive, but best in class, or you risk a higher employee turnover. We know benefits are also the 2nd most significant expense after wages, so ensure you offer benefits that your employees value the most.
A recent study asked employees to rate the importance of their benefits as “very important” to “not at all important.” This study showed the following percentage of employees surveyed felt the benefits offering was “very important” and influenced their choice of employer:
- 93%: Strong 401K Plan
- 67%: Paid Time Off
- 63%: Health Insurance
- 37%: Life Insurance
Based on the above findings, one can conclude that Paid Time Off is a more important benefit than Life Insurance to employees. Be sure to emphasize and spend wisely on the benefits your employees value.
- Learning & Development – If you are not growing, you are dying; that is the same with employee development. If you are not developing your employees, your company is slowly dying compared to your competitors.
- UPDATED Policies and Procedures – This doesn’t sound fun! Make sure your policies and procedures are updated regularly to meet the current needs of your employees. Having compassionate policies and procedures will allow your employees to know the “rules” and that they work for a caring company. For example, many of your employees may have parents and grandparents who are baby boomers, and these baby boomers are not getting any younger. Having policies and support available to employees dealing with caregiving responsibilities or with a death of a loved one will be remembered; not having that support will also be remembered.
- Retention – Retention is not just a metric; it needs to be a strategy, or your P&L will suffer. Hire right, promote, and retain. Bad hires cost money, reduce revenue and punish the bottom line.
So how do all these things tie back to the P&L? It is simple – TURN OVER. Good cultures driven by the items above result in a lower turnover. Keeping your talented people allows you to take on and complete more projects per year, reduces recruiting costs by not having to replace team members, and encourages satisfied employees to refer their friends to your company. When you add all of that together, not only do your expenses go down, but your revenue goes up, and that is a real P&L improvement.
BOOST has a team of expert Senior HR Professionals that can provide SME-level, project Level, or day-to-day HR support. Let us know how we can help you grow your GovCon business.