Monday, January 31, 2011

HR: Make Your Case!!!!

In preparation for an interview with IQPC this morning regarding their upcoming HR Metrics Summit, I am pondering the following question:

Do you often find it difficult to build a solid business case for investment in HR? How are you meeting this challenge?

I will answer this from our experience and from a client's perspective. I do see many HR professionals struggle with getting budget and resources for HR related investments. This exercise is especially difficult when HR is competing with other functional areas competing for the same dollars.

I have a strong bias on how to accomplish the business case....get your data and tell a great story. For example, say that HR is looking to invest in a training program and/or a rewards program for a call center. At the same time marketing wants a new CRM and sales wants to add staff. All options are competing for the same budget dollars.

The key for all functional leaders is to make a LINK to the desired business outcome. So, let's say in this example the desired result is growth measured in market share.

The HR leader will need to create a Business Strategy Map and determine how the training and/or rewards program links to the desired business result. After the linkage has been made, then statistical testing can take place by analyzing data like turnover, performance scores, engagement scores and by performing analysis on pilots to determine if training has the desired impact.

The analysis piece becomes just HALF of the battle. Your analysis is only AS GOOD AS YOUR STORY. So, many times the data becomes the story, you have seen those presentations with 30 pages of numbers. Don't do that! Although, the tendency is to show off ALL your work, try to keep your story to 1-2 "killer" slides. The goal is to show how the HR investment impacts the business result....growth...and by how much. Obviously, there are other factors that impact outcomes, but by using statistics you can prioritize those investments from most impactful to least impactful.

You don't have to have a PhD to accomplish this analysis. All you need is an understanding of the business, a curious mind, and some good analytical tools....and you too can make your business case!!

What is your experience when asked to defend your HR investments?
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