HR–Show Me the Money!

Show Me the Money

Oswald, author of the Oswald Letter, suggests that HR can start by concentrating on three areas: turnover (see yesterday’s Advisor), productivity, and absence. Here’s how to present to him:

• Tell me how much your plan would save.
• Tell me how much your plan would cost.

(That tells me what my ROI is.)

• Tell me the risks and the downside.
• Tell me the minimum savings needed to break even.

Now you’re talking my language, Oswald says.

Productivity

What if you could increase productivity by just 1 percent? Oswald asks.

If you have average revenue per employee of $150,000, and your productivity gains drop to the bottom line, that’s a $1500 savings per employee.  Got 1775 employees (as in yesterday’s example)? You just saved me $2.66 million, Oswald says.

Absenteeism

What if you could reduce absenteeism by 20%? Oswald continues.

Say the company’s average salary is $33,500. That gives a cost per employee per day of $130. If your average employee misses 10 days a year, that’s $1300 per employee, or $2.3 million for 1775 employees. Reduce by 20%, that’s saving me roughly $460,000 more, says Oswald.

Put It All Together

Let’s total the savings from turnover (in yesterday’s issue), productivity and absenteeism, Oswald says:

Cost Reduction Project	Savings
Cutting turnover	$1.7 million
Increasing productivity	$2.3 million
Reducing Absenteeism	$460,000
TOTAL	$4,460,000

Think you have Oswald’s attention now?

Here are his Four Lessons for getting a seat at the table in the C-Suite:

• Lesson #1—Talk “MY” language and my language is numbers
• Lesson #2—Measure what you to and whenever possible translate it into dollars
• Lesson#3—Act like you belong at the table (You may need to learn a foreign language—finance, Oswald says.)
• Lesson #4—Become invaluable to the people who report to the CEO.

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Final Tip

Find out what the top three strategic initiatives for the company’s leaders are. Attend industry events to understand the issues, and then figure out how HR can be involved, Oswald says.

Managing up, just one more daily challenge—in HR, if it’s not one thing, it’s another. Like FMLA intermittent leave, overtime hassles, ADA accommodation, and then on top of that whatever the agencies and courts throw in your way.

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