How To Turn The "H" in HR into Cost-Efficient Quotient

We’ve all heard the stories of how friends and relatives managed through “’hard times” in the past. We’ve listened as they colorfully detailed “living off the land” or “making do with what (they) had”. Were you paying attention to the lesson being shared in those conversations? It’s time to apply a little of that sage wisdom to resolving some of the issues we’re facing today. In 2022, job openings hit a record high, and 4.54 million people walked away from their jobs.¹ Although we continue to experience a lingering labor shortage while inflation remains at an all-time high, continued growth and success is not impossible. The approach to overcoming these challenges requires a fresh perspective.

The BIG question in 2023 is – How can we do more with less? Improving profit margins is a key goal for any business year over year, so annual planning typically includes action items targeting cost efficiency, waste elimination, and additional revenue generation. However, as the adage goes, sometimes you have to spend money to make money. The new challenge for this year is that inflation has decreased the buying power of the American dollar making it increasingly difficult to get enough bang for your buck.

By in large, the greatest business expense is staffing – recruiting, hiring, training, benefits, engagement, and the ultimate staffing goal – retention. Retaining valuable talent will be a critical objective for business growth and sustainability throughout 2023. With 50% of organizations surveyed reporting a reduction in hiring plans this year², businesses will rely on the current talent to accept more responsibility and continue to meet company goals with fewer resources. But how can you retain key talent by asking them to do more with less?

To attract and retain top talent in today’s employment landscape, employers must be focused on the “H” in HR, more so than ever before. The world has changed vastly in the last couple of years as the pandemic forced a large part of the global workforce to transition to remote work. What was thought to be a temporary solution turned out to be a catalyst for a whole new world of work. With this unexpected pivot, the human aspect of Human Resources has been thrust to the forefront of all employment conversations. Acquisition of talent, improving employee engagement, and driving retention have become the top priorities of managing a successful employer-employee relationship. Consequently, focusing on the total employee experience is the best bang for your buck.

In this employment upheaval, traditional employee benefits have lost their place on the retention leaderboard. The assumed advantages of merit increases, health insurance, and stock options have been replaced by more tangible requests including flexible work schedules, remote work options, development opportunities, and concerted efforts to support work-life boundaries. Embracing the reality that workers today are looking for more than a fair wage is a jumping off point for success this year.

Here are a few ideas to help employers offer a better employee experience without breaking the bank.

1. Provide total rewards statements. Since many workers are more focused on what a job holds for them besides a paycheck, be honest and transparent about what you offer them besides the net pay on their check each payday. Make them aware of the additional cost for benefits you may offer such as employer-sponsored health coverage, life insurance, paid holidays, paid time off, the value of an employee assistance program, or other benefits unique to your organization like paid gym memberships, cafeteria allowances, or discount programs. Employees occasionally need to be shown the “big picture” when conversations about compensation arise.
2. Create more opportunities for growth and development and increase promotions from within. It’s a perfect combination – employees are indicating a growing demand to learn more skills and take on more responsibility, and employers with tight budgets are struggling to meet production demands without hiring more workers. Here is another big bang for you buck! Invest in your current workforce by addressing their desire to contribute more to the organization. Create or improve performance development plans. Review your performance management process for alignment with company objectives and the optimum employee experience. This effort will improve employee engagement and lead to better productivity. Better productivity is a cost-saving objective, a result of making the most of what you have – effective, streamlined processes, clearly defined goals and measurables, and a highly engaged workforce.
3. Offer additional training opportunities. There are thousands of free online training solutions ranging from TED talks and free videos to courses offered by top universities. Employees will see this offering as useful for career advancement but may be overwhelmed at the volume of available free resources. Do your research and create a list of courses and programs relevant to your industry and positions so employees have a defined list of options from which to choose.
4. Consider flexible work options. Work/Life Balance remains a critical requirement for those moving throughout the labor market, and especially for those newly entering or re-entering the workforce. The pandemic gave us pause to reconsider the priorities in our lives, and it’s no surprise that family and personal wellbeing now rank at the top of that list for most of us. Providing options such as remote employment, hybrid work, and/or flexible schedules is considered a prized competitive benefit in today’s world of work.
5. Create an employee recognition program. For some individuals, a word of praise holds more value than monetary reward. It’s human nature to want to be acknowledged for a job well done. Whether it’s a blurb in the company newsletter, a shout out in the monthly staff meeting, or lunch with the boss, it’s a very inexpensive perk that offers great ROI.
6. Find out what matters to your employees. Engagement surveys are a great way to gauge the sentiment of your employees. They help by offering a semi-SWOT analysis of the current state of your workforce. The valuable information presented in engagement surveys can aid in identifying areas in which improvement will have the most effective outcomes.

As you likely realize by now, the underlying theme here is the importance of employee engagement. Employee satisfaction and buy-in has always been integral to the success of a business, but in 2023, employee engagement will be pivotal. Think about it…no matter how many customers you have or how much product you sell, without the workforce to support the supply and demand behind the finished product, you can’t sustain the productivity, the profitability, or the proposed value exchange. Basically, you’ll be forced out of the market.

Employees are the “H” in HR. Their human quality is what makes them unique and provides the ability to contribute to the workplace in varying impactful ways. While labor is likely your largest expense, an engaged workforce is your greatest asset. While you may not have drastic growth or hiring plans for the current year, use this time to up your game. Create the best employee experience possible from onboarding and training to career development and performance management. Cultivate a culture of care, focus on the value exchange in the employer-employee relationship, and reap the rewards of a highly engaged workforce. Research has proven time and again that happy employees are more productive overall; not just in how much work they can do in a measured period of time or how much money they can save the company by being more efficient, but also by improving the work experience for coworkers, being a role model for others, and ultimately improving the customer experience. Happy customers are repeat customers so it’s the ultimate bang for your buck – invest in your employees properly and your customers will continue to invest in you!

¹Department of Labor Job Openings and Labor Turnover Survey

²Employ Inc.’s Quarterly Insights Report

REMA GRAY, SHRM-SCP
Senior HR Advisor, HR Services

With a lifelong interest in relationship management and a deep curiosity for human behavior in the workplace, Rema Gray began her payroll and HR career over 25 years ago. She pursued a degree in Psychology from the University of South Alabama and parlayed her education and training into a Human Resource Management career. Her experience ranges from managing the intricacies of human capital growth and development of small local businesses to developing teams and managers for large national corporations. She has worked in many industries, including chemical plants and oil refineries, business services, retail, and many other spaces. She currently manages HR for Crescent Payroll Solutions, contributing to the creation of policies and procedures, measuring and managing organizational risk, organizing, training, and development of the operations team, and maintaining a high level of employee engagement. Rema’s passion is getting everyone in the proverbial boat rowing in the same direction. She believes employee commitment to the organization’s Mission, Vision, and Values is not only essential to the achievement of its goals but also paramount to the overall health and sustainability of the organization itself.

“Human Resources is a basic term to describe a dynamic topic. Focusing on the human part of it is integral to the success of any employee-based business.”