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HRmonise will contribute to your business’ bottom line. |
Human Capital management impacts all aspects of your organisation and has significant
potential to value-adding at all levels. Unfortunately research has shown that in
most cases organisations are not realising the Human Capital potential and therefore
your human resources could be letting the organisation down. What is this research
really telling us in hard bottom-line terms (average for Australian organisations)?
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Managing Poor Performers |
A study in Australia found that employers waste the equivalent of $1,118 per fulltime
employee in management effort just in dealing with poor performers.
HRmonise not
only helps managers deal with poor performers it directly addresses the performance
measurement.
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Yes, for an average organisation in Australia HRmonise will potentially
contribute $1,118 per annum per fulltime employee just by saving management time
dealing with poor performers. |
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Recruiting the Right People |
Getting recruitment right is critical; a wrong recruitment decision will cost your
organisation between 50% and 150% of base salary as reported by Mercers (others
say even higher – 200% to 400% if the separation is hostile)
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HRmonise and its recruitment
module provides a professional recruitment process from role design, recruitment
management, relevant interview questions and applicant evaluation and competency
gap analysis. |
| Yes, for every right recruitment you make you avoid potential losses
of between $30,000 and $90,000 based on an average $60,000 base salary. |
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Human Capital Development |
People development is usually the “poor cousin” when it comes to decisions on organisational
change and business growth. Human Capital development usually lags behind other
considerations in the organisational change program such as structural change, new
capital works etc.
| With HRmonise the human capital and organisational management
is integrated and can be developed together. Future roles and therefore people can
be developed in preparation for, or even to drive change. This readiness includes
structure management, role design, recruitment and quantitative performance measures
which can be aligned with the changing strategic direction of the organization. |
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Yes, HRmonise can drive the human capital development in your organization. A UK
Proudfoot 2006 Productivity report concluded poor productivity costs equated to
36 days per worker per year or a 16% waste. This represents $8,000 to $9,000 per
worker per year (or 3 times the above estimate). A mere 5% growth would on average
represent $3,000 per employee. |
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Recruitment Costs |
Recruitment management is a cost to any organisation whether it is outsourced or
managed in-house. This cost is between 15% and 25% of base salary or even higher
for executive placements.
| HRmonise and the recruitment module will streamline your
recruitment and reduce the cost. It also increases the level of professionalism
and quality of the recruitment. HRmonise precisely profiles the roles, generates
the right questions and sizes the “applicants” assisting in producing professional
appointments. In addition to the quality of the recruitment HRmonise streamlines
the management reducing costs by approximately 50% or in real terms 8% to 12.5%
of the base salary; this is a saving of $5,400 per recruitment. |
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What does this all mean for your organisation? |
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Calculations based on Australian typical organisation in AUD:
1. $1,188 per employee
2. 8% T/O p.a. with 5% "not right", on average salary of $60,000 - based on ave.
cost to company of $60,000
3. Potential loss of $3000 per employee p.a.
4. 8% T/O
to be recruited @ ave. savings of $5400
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The potential savings the Human Resource Management and HR department can achieve
for the organisation’s bottom-line is substantial. This is a good return on the
investment in people and a clear addition to the bottom-line. If your organisation
is not achieving these types of savings you are throwing away money, and the HR
department is probably an overhead cost rather than a true contributor.
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Test it for yourself using the diagram on the right, how many employees do
you have?
What is the potential improvement you could make to the bottom-line through
more effective Human Capital Management?
For example, 400 employees it is $1 million,
4000 employees it is $10 million using a conservative 50% implementation for an
average Australian organisation. |
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