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Is your HR department a profit center?

Is our HR department a profit center? Do a survey in your organization and ask this question to every employee, including the CEO and the Head of HR. This survey will be an eye-opener to all HR.

You will get a skewed bell curve. There are many who may say, Yes, our HR is a profit center. Well, that is superb. Can I see the numbers in the Balance sheet? Do we even have answers?

What can be done?

  1. HR must believe that HR can be a profit center. The perception that HR is a cost center is so deeply ingrained in the Corporate DNA, that it is seldom challenged. The people who challenge it are condemned, criticized, or pulled down by their very own bosses and colleagues.

  2. In one of the interviews I was taking, a senior sales executive remarked, ‘When I remember HR, I remember salaries, outdoor training programs, and events. Never heard of HR being a profit center.’ Can we have separate functions that do not come under HR, initially which was a sub-function of HR? Example Can we separate training (with quantified and measurable objectives) and training that involves outdoor location as a separate function, which employees feel is a vacation? Can we separate employee engagement as a separate function not as a part of HR? Are we willing to take this quantum leap?

  3. We can have systems in place that will have every penny count. Are we willing to invest in the systems and the skills required to run them?

  4. Can we change our own mental models?

The journey is tough with challenges just like climbing Mount Everest. It is not everyone's cup of tea to take the challenge to prove that HR can make a profit provided we unmask our own mental models and streamline processes.

Just like it took a pandemic for corporates to realize that working from home is possible. Let us not wait for a pandemic in HR to realize that the HR department can be made a profit center.

With gratitude

Dr. Sonali Wagle

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