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  Feb 16, 2015  

Strategic HR Weekly "Sales" Tip #14

Does HR Produce a Profit?

It's been my experience that CEOs will tell you "no".

And yet many in the HR space still don't seem to agree with that. "Make HR a profit center!" is still heard coming from some HR people.

Here are a few quotes/snippets from a recent LinkedIn SHRM discussion:

  • If an HR person can sell the potential of employees to Management then it can become a viable revenue generator, not just a cost center
  • so it's even easier to devalue their role as the people responsible for risk management rather than regard HR as a profit center
  • I must disagree on the fact that HR does not produce any profit
In order to sit at the same level as the CEO, CFO, CIO, etc., HR needs to realize that their initiatives impact and can help contribute to and drive profits, but they don't "produce" it. Just semantics? Not in a CEO's mind, and that's who counts if you want the "seat".

The CIO knows their IT department doesn't "produce" a profit. It's a support roll!

The VP of Sales knows their department doesn't "produce" a profit. It produces revenue, and that's not the same thing at all!

Am I bashing the HR department? Not at all. I love HR! It's equally important as every other support department (and maybe even a bit more). But if you tell a CEO that HR is going to "produce" a profit, you'll get an eye roll and a snicker behind your back.

But if HR recognizes that employees' efforts are what ultimately optimizes profits, and HR's support role is to help optimize employees efforts and results, the you can tell a CEO you'd like to show them how you can make HR "help drive" profits, and you'll have their attention. And they'll ask you "How?", and that question should be music to your ears! It's your opportunity to shine!

But this is just my opinion... What's yours?


Rob Blunt       View our profile on LinkedIn
President, 4-Profit-HR

phone: 866-868-5885