I traveling back from speaking at the IQPC HR Shared Service Outsourcing Network Summit in Chicago (which was a great event) and man there is some amazing stuff going on! The flight gave me a chance to reflect on how every function of HR is rapidly evolving and having major impacts on companies, communities and lives! So here are my top ten reasons!
10. The majority of the US Economy is now a Service Economy
68% of the US economy is based on Services! So think about the change since the 1920's when it was about 30%. The key to this factoid is that the generation of "value" in the economy is people! It is how we serve each other (writing, cooking, consulting, selling) etc that has become the economic engine. As a result, all of the work HR has done in soft skills training is making a HUGE difference.
9. It is all about the Idea
Most business models revolve around 4 major things - the Idea, the human capital, the resources, and the markets. Depending on the business, the importance of each varies. For instance, it used to be Mining was not about the "Idea" (e.g. Dig here), nor the resources (just dig), but more about the resources (Mining rights) and the markets. Now that has changed! Now it is about the individuals who are inventing new ways to find the resources and/or mine them that are making mining company's successful! Companies are reaping huge successes based on the "ideas" when is based on HR's efforts to attract and retain awesome talent.
8. It is about the Profits !
Ever want to have a quick way to prove the value of HR to a senior executive? As them them what the book to value ratio is for the company is (you should also know this!). This is the capitalized value of the company against the assets! It used to be that companies' book to value ratios were low - as it was all about what they owned (e.g. real estate, inventories, capital assets, etc.) and investors would get nervous if the stock value got a lot higher than that. Now, there are companies that have very low Assets and have huge market capitalization (think Facebook!). Or think Biotech groups. So what are investors willing to pay a premium for? It is the people! This is often put on the books as goodwill, R&D, or just unknown. I have written a lot more on this - so go here!
9. It is about the Dreams!
Maybe this is being too focused on turning a negative into a positive - but studies about the younger generations are showing that they want to be a director, a Vice President, and/or the CEO before the age of 30! While us with gray hair shake our heads and mutter about them having a lot to learn - the reality is that HR has done a great job! All of the efforts around getting rid of the "Boys club" is working! If the younger generations are coming in not think there are cielings - then we are making huge progress!
8. It's about the Paychecks!
In the last twenty years - look at the progress that has been made on making sure people are getting paid fairly! The compensation world has exploded with information around salary surveys, equity studies, etc. The time and attendance systems have become almost space age! So for a HR professional who is wanting to make sure their talent is paid fairly - the tool set is vastly increased!
7. Its about keeping people healthy!
Look at the efforts that companies are making to make folks healthier! This ranges from normal health fairs, to biometric tests to Rx compliance programs! I have read story after story of how someone, because of their health program, found out they had a chronic condition and were able to address it sooner than later! We can debate as to the motive (e.g. reduce health care costs, etc.) but I challenge everyone not to lose sight of the true impact - which is we are helping save people's lives! In fact, this isn't HR saying it, a recent survey showed that 62% of employees felt their employers Wellness programs were making them healthier!
6. It's about diversity!
There is a whole lot of debate going on in the United States about same-sex marriage, with the 12th state in the US now legalizing it. But how many companies offer Same-Sex benefits? 47% of companies over 500 employees offer same sex benefits and as the size of the companies grow - the prevelance goes up to 75% according to Mercer.
The amazing thing about HR, is that we don't need to wait for the government to catch up (e.g. AAP programs, Vet programs, etc.) we can make a positive impact in our companies without waiting! I know when the Fed announced a bunch of tax incentives around hiring Vets, that for a lot of companies it seemed like old news - a lot of amazing companies were already doing the right thing without needing the incentives. Bottom line - your company's HR programs have social impact!
5. It is about Community
Look what has happened over the last couple of decades in the business world in regards to Corporate Social Responsibility! You had groups like the Davos forum for years getting leaders together to start focusing on longer term issues, and now we have the new ISO 26000 standard on Corporate Social Responsibility. Companies are now taking concepts like the Triple Bottom Line as a fact as oppossed to interesting theory.
Additionally, corporate giving in 2011 held steady at 14.55 Billion, which is admirable given the recession. I realize that the number should be larger, but lets not get lost in that right now. Realize that 14.55 Billion does a tremendous amount of good!
4. It is about shaping the next leaders!
Remember when it used to be about knowing the right people, going to the right schools, having the right parents? Now, there are more and more examples of CEO's and Corporate leaders who came up through the company! The probability that you have someone sitting in your training class today - who in a decade might be a senior leader is even higher, and higher!
Harvard Business Review did a pretty interesting study of the top 100 CEO's in the world - and 73 of them do not have their MBA and 16 of them are considered to be outsiders.
3. It is about valuing our friends!
New statistics are showing that our employee's networks are becoming invaluable for companies! The average social network is 150 people per employee, and that is starting to reap rewards. Certain companies are starting to see employee referrals account for up to 60% of their hires, and there are all sorts of statistics on why employee referral employees are better employees!
2. It's about leaving on good terms!
One of the more recent innovations in the HR market place is the growth of outplacement services. It used to be that is was offered as a Perk in the 1970's for executives only. Now companies offer a wide range of outplacement services which not just are fluffy stuff - but the services really do help! For instance, RiseSmart has taken a scientific approach to outplacement, and they can get people to their next job twice as fast than the average. Pause for a second and think about that, that is less time somone has to deal with the stress of being unemployed, the less their spouse is worried. And yes, there is a ROI, but most HR folks don't know about the SUTA tax benefit - we do this because it is the right thing to do.
1. It is about being Human!
For me, the absolute coolest thing about HR - is it about the Golden Rule! The days of Michavallien HR theory have been disproven! The best way to run an amazing company, and work with amazing people is to treat everyone with the compassion and care that they deserve. It is about doing the right thing!
And this is why I think God every day that I am blessed to be in HR and I am in a function where what I am asked to do by my faith and my job are the same thing every day!
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