How Can HR Save your Business Money?
With the cost of living rising dramatically, chances are your business needs to look at expenditure too. Inflation rose to 9% in April. It’s now at the highest it’s been for 30 years, and it doesn’t look like it’s going to get better any time soon. So now is the right time for you to look at how your business could make savings and protect future revenue.
How HR Helps to Increase Productivity and Profitability
The fact is HR can help your business save significant money – both by stopping your business from losing money unnecessarily, and increase productivity to achieve more from less. That’s why we’ve written this blog. It couldn’t be more timely!
1. HR Can Help you Navigate the Current People ‘Crisis
What is the Great Resignation? “The Great Resignation”, starting in the spring of 2021, is the latest people crisis going on where more people than ever are looking to change their job. The average cost of losing a member of staff (earning over £25,000) is £30,614. If you lose 3 people in a year, that will cost you the best part of £90K! This is not just in recruitment costs. It’s the management time involved in replacing and finding new people and onboarding them. Along with this, consider the productivity drop from when the previous person leaves, up until the new person is up to speed. And remember, it’s very difficult to recruit at the moment. So if you find yourself short of people, productivity will also plummet.People need a good reason to want to stay and not jump ship. This is where HR consultancy can help in creating an environment where people are motivated, engaged and remain loyal. At the top of the list is your company’s culture – but cultures don’t just happen by accident. You have to work on them – and hard! Culture is the accumulation of a range of positive employee experiences including:
- Setting and re-enforcing high standards and expectations
- Offering competitive pay and benefits
- Providing professional development opportunities
- Prioritising your employees’ wellbeing
- Providing a flexible working environment
Unless you’re an expert in all of these things, then this is where a HR consultant comes in.
2. Time is Money, People
You’ve heard it before, but it’s true. Time is money. And if your team is spending its time on the wrong things – or not focused on the right things – you’re wasting time and money. Too often team members are not clear on what is expected of them, what they are meant to be doing, and as a result a lot of time is wasted. So, you need everyone in your team to be clear on the following in relation to their role
- Their key responsibilities
- How they align to the company’s bigger goals, and to the customer
- The actions required, time to take, frequency, and when
- The activity targets expected
- The results expected
A HR consultant can help you to address these by putting the relevant practices in place with :
- Role & Responsibilities profiles, alongside key objectives for team members
- Time-chunked Activity Plans, so people know what they’re doing at any point of time
- Activity targets and results trackers aligned with the business’ key goals, so that everything everyone does is contributing to achieving the company’s bigger goals
- Performance management systems that measure people’s performance against targets and support them in their achievement.
What is Productivity in Business?
You can measure a business’ productivity by turnover per employee. Let’s say you have 30 employees, and your productivity is £75,000 per employee. A 10% uplift gives you an extra £225,000 on the bottom-line. Most people and businesses can be more time efficient in our experience – at least by 10% by adopting these practices. In this way, you’re able to achieve more from less.
3. Invest in your people
It’s not enough for people to just know what to do. To drive productivity, they must have the skills and the desire. It’s vital that everyone in the team has the right skills and is supported with that. Again, a HR consultant can assist with putting the right practices in place, including:
- Fixed, scheduled and regular one-to-ones to offer employees regular feedback
- An individual Training Plan
- Fixed, scheduled Time in everyone’s diary for training and development
Desire, on the other hand, comes back again to having a positive culture. Is your company a good place to work? Are you known for your inclusivity? Do you have a team that loves working for you, or is it just a job? Basically, do you need to reassess what you are doing to keep your people happy and motivated? Things like flexible working arrangements or additional support with childcare, for example, could go a very long way to nurturing a relationship with more commitment and loyalty within your team. Today, people care about more than just what they’re being paid (although this is still a very important consideration!). They want to work for a business that aligns with their own ethics and values, and one that offers perks that make a difference to their lives.
Boost Employee Productivity and Save Money
It might sound like a lot of work (and expense) but placing the right focus on this could ultimately save your company a lot of time and money. Don’t be tempted to skip this step if you’re serious about saving money and growing your business. A happy, healthy employee is a motivated and productive employee!
4. Automate, Automate, Automate
Continuing the productivity theme, it’s a lot of the small things that eventually add up to, well, quite a lot. Things like approving and logging holiday requests. Things like managing expenses. Things like planning those performance reviews. Things like keeping track of and updating employee records and documents. They’re all things that need to be done in your business. But aren’t they just repetitive and long-winded? Aren’t they laborious? And these aren’t the things that excited you when you decided to go into business.
HR Automation Software
But there’s another alternative that makes the entire process far easier. There’s an abundance of HR software available to you that means you can take care of all of this simply. One that we particularly like is CharlieHR. CharlieHR can automate so many of those tedious HR tasks that take up too much of your time. And, better still, it’s a really low-cost way of getting things done. That means that your time is freed up to work on the things that are more important when it comes to growing your business and its revenue.
5. Compliance with the Law
Oh, and finally, employment law. It’s such a minefield! It’s constantly changing and, unless it’s your day job, it can be tricky to keep up to date with what’s going on. It’s vital that you ensure you have all the right documentation in place, both for your business and for your people. That means things like a company handbook, contracts of employment for everyone, and importantly, policies on everything that is relevant to your business. A lot of companies fall down when they experience an issue, only to find they have no formal policy in place to enforce their ruling.
The risk of winding up in an employment tribunal is extremely high if you’re not compliant with employment laws – or don’t have the HR expertise to follow through with it compliantly. And the cost of that to you has the potential to be astronomical! The average cost of an employment tribunal to an employer is £8,500. The maximum basic award for an unfair dismissal claim is £16,320. Compensatory awards can be up to 52 weeks’ wages, or £89,493 (whichever is lowest). And there is no maximum award for a successful discrimination claim. This doesn’t even factor in the management time, cost and stress.
If you take just one thing away from this guide, it should be to get your documents in order. Now. You don’t need to do it all yourself, either. Again, this is where a HR Consultancy can help to make it a very simple process. And it won’t break the bank. If you do already have your handbooks, contracts and policies written, it’s worthwhile to check when they were last updated. It can be just as dangerous to maintain old policies as it is to not have a policy in the first place!
A little more support
It’s easy to talk about all these great things that you should be doing to save your business time, but if you don’t have an in-house HR team, or even person, surely actioning all of these points is going to cost you even more money – and time. Right? That’s where an outsourced HR Consultancy comes in. But as a successful business owner or manager, you should already realise the importance of spending a little money today to make a huge saving tomorrow. And that’s exactly what this can do for your business.
If it’s something that you’d like to explore at the moment, we’d love to talk to you about how our HR consultancy may be able to help you. Just get in touch and start a discussion.