THE HR IMPACT ANALYSIS

Human Resources Manager, August / September 2012

The HR function has struggled to gain more influence within the company for as long as we can remember. With our model, we will show how this can be improved – from the strategy discussion to the organizational development of the HR function.

Incorporation into the HR cycle

The next step is to align the activities agreed upon in the matrix with HR activities that have already been scheduled. The result is a company-specific HR cycle. The individual elements of the HR activities – from human resource planning to employee exits – can be depicted. (fig. 2)

Even when the HR department has a good reputation within the company, it always has limited resources. This means that usually not every measure can be implemented. Therefore, prioritizing the measures is an essential part of the further process.

Prioritization of measures with ROTI 

(Return On Time Invested)

The ROTI method is a simple and effective method for prioritizing business issues. The x-axis shows the investment in time and money for a measure, the y-axis shows the return, i.e. the revenues for the company. If this model is applied consistently, it facilitates a discussion – based on clear parameters – on which activities of the HR department are profitable for the company and which should be discontinued. In addition, it creates clarity on the allocation of resources in the HR department, depicting focus topics and weak points.

In particular, this helps to identify the topics that help the company to be successful in the long run and is a method to depict the added value the HR department has for the company. (fig. 3)

Consequences for the HR department

Now, strategies, goals and measures will be clearer for line managers and HR staff. Everyone involved will know and agree where they – the business areas as well as HR  – are headed. Growth in sales, product launches, outsourcing, new international market entries – if these topics are discussed in detail, it will result in specific action plans for the HR organization.

HR will be facing some important questions:

• Does the HR function have the competencies and experience to facilitate an implementation?
• Which employees in the HR department fulfil these requirements today? Who has to be developed to overcome deficits?
• Which know-how and skills – also on an international level – have to be acquired immediately to provide effective support for the business units?
• Which organizational changes within the HR department are necessary to face future challenges? Is it for instance necessary to build centers of excellence?
• What does the HR organization have to do to have the necessary influence in important decisions in the future?

These questions can be the basis for an organizational development process enabling the HR function to do exactly what is necessary in the coming years for the company to be successful in the market.

Summary

Of course, it is nothing new that business directors and HR managers discuss their company’s goals. If, however, they implement our analysis tool correctly, these discussions are structured unambiguously, the necessary measures become clear and the whole process is documented. The HR managers will employ our HR Impact Analysis successfully if and when they develop a deep understanding of their company and its processes, interview their business colleagues well and can moderate the meetings effectively. In order to ensure the implementation afterwards.

© 2012 Helios Media GmbH