How an Effective HR Leader Can Help Drive Results

July 24, 2019

Many middle-market privately held companies are becoming increasingly aware of how an effective human resource leader can contribute to the success of the business’s bottom line. Consider just a few of the significant changes that have taken place in the last 10 or 15 years that represent continuing challenges for many businesses.

The Cost of Healthcare

Healthcare costs have been rising at 3 times the inflation rate over the last 10-15 years. The design, evaluation and administration of benefit plans have become increasingly complex and impactful as costs rise. There are more options for offering employee health insurance programs—HSAs, PPOs, HMOs, etc. They are complicated in themselves and they have a long tail of legal and financial consequences (think ERISA, COBRA). In addition, wellness programs are no longer optional if you want to manage the long-term trends in healthcare costs for a company. The decisions that your HR leader makes in these areas alone have a significant impact on your bottom line, as well as on your ability to attract talent.

Diversity in Generations

Changing demographics in the workplace have made it necessary to offer employee benefit options that attempt to meet different employee needs. Generation Y and Millennials typically want more flexibility, both in their benefits and in their scheduling. Middle age to older workers typically want the reassurance of retirement fund options. While there are exceptions in each group, your HR leader must effectively communicate the value as well as the options available of employee benefit programs so that employees can make wise decisions based upon their individual needs.blog-400x300.jpg

The baby boomer generation has begun to hit retirement age in the last several years, however, retirement patterns are much less predictable than in the past generations, making succession planning at all levels of a company an emerging and critical need. Some baby boomers are able to retire in their late 50’s and some need to or want to work until they are 70+.

The Increase in Turnover

In addition, undesirable employee turnover among key performers, from entry-level employees to management ranks, has increased. Turnover has increased for a variety of reasons. This includes employees being less loyal because employers are less loyal, ability for employees to locate job opportunities because of the internet and networking events, employees getting scared off because employers have no succession plan or simply better pay or benefits. In addition, the economy has improved gradually over the last ten years as evidenced by the lowest unemployment rate in 50 years.

Turnover is expensive. The competitive marketplace for customers and employees, together with the ever-changing technology and business environment, have made it necessary for businesses to invest more in employee training and development programs. Therefore, more company money is riding on each hire. The Society of Human Resources Management (SHRM) estimates that the total cost of losing key employees is anywhere from 30% to over 150% of the salary associated with that position.

And let’s not forget the risk management side of HR. The cost of litigation related to wrongful discharges and mismanaged diversity issues has increased in the last 10- 20 years.

An effective HR leader and HR function can help a company’s bottom line and develop a positive and engaging work environment.

HR Practices That Support an Organization’s Goals and Performance:

  • Staffing & Recruitment
  • Compensation Strategy & Administration
  • Employee Benefits & Wellness Program
  • Incentive Programs
  • Training & Development
  • Employee & Labor Relations including employee engagement
  • Performance Management
  • Policies & Procedures
  • Management & Supervisory Skills
  • Career & Organizational Development
  • Succession Planning

We discuss six (6) key HR functions in further detail in a white paper written by The Overture Group. They are:

  • Compensation Management
  • Benefits Evaluation and Administration
  • Recruitment/Talent Acquisition
  • Training and Development
  • Performance Appraisal and Management
  • Employee and Labor Relations

Please check out our white paper for more detailed information.


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