The Cost of Undervaluing Human Resources

human resources value

Curious about human resources value within an organisation? Any HR Department carries out essential tasks that act as the backbone to the performance of the organisation’s workforce and in suit, the success of the organisation as a whole. Monitoring employees in terms of sickness absence and timekeeping along with supporting and developing staff are some of a HR departments main responsibilities.

Any organisation is multifaceted and the HR function must reflect the needs of a dynamic organisation. Having a HR department which has the ability to continuously monitor all information regarding employees such as time keeping, holidays in addition to personnel data including training and development opportunities all encourage and support a high level of employee – job satisfaction and a high retention rate.

Not appreciating human resources value within an organisation can reap a number of costs for any organisations as well as possibly large fines for non-compliance with laws and legislation with regards to the workforce.

Reducing employee turnover is one of the most commonly spoken about human resources value. Organisations with a high employee turnover rate  is generally as a result of not monitoring employees and developing the workforce in terms of analysing training needs and providing career opportunities.

Employees who leave the organisation means their job is no longer being carried out so there is a loss of productivity and the organisation may not achieve some of its’ shorter term goals until the position is filled. In other circumstances, remaining staff may need to take on the various aspects of the role of the employee who left and this may result in over-worked employees which will have a detrimental effect on the quality of work produced.

Training is another big cost for many employers. A training course has the obvious costs of the price to participate on the course and the time lost due to attending the training course, however even when training consists of one employee showing another what to do, the cost here is the time spent mentoring. A high staff turnover rate means this mentoring process will have to happen more frequently and so continuously time is lost.

Recruitment is a lengthy, time consuming process. The time spent filtering CV’s, inviting candidates to interviews as well as carrying out the interviews in addition to the cost of advertising for the job itself. The alternative is to pay a recruitment agency to carry out the recruitment process on behalf of the organisation, however, this too comes at a cost. By actively focusing on supporting and developing employees, turnover rate will be lower and the so employers will not need to carry out the recruitment process as often.

HR teams are often well versed in recruitment, further highlighting human resources value within an organisation.

Research carried out by Oxford Economics discovered that it costs £30,614 per employee to replace a member of staff. This is inclusive the cost of the loss of output from the business whilst the replacement employee gets up to date and speed with the role and the cost of sourcing and recruiting to fill the vacancy.

At HR Services Scotland, we can help your organisation carry out the core and extensive activities that a HR department is responsible for. Monitoring, supporting and developing your employees to ensure your organisation achieves its’ goals is our main priority. We always demonstrate human resources value

If we can help you with this or any other HR issue, please do not hesitate to contact a member of our HR Team at HR Services Scotland Ltd on 0800 652 2610.

For more information about the services that we provide at HR Services Scotland, please get in touch with us here.