Memo from HR: We Do Too Create Value

A professor's criticism of the profession stirs up a frenzied debate.

One, though, said that, “We are not supposed to be good at data analytics. We are supposed to be good at helping craft the decisions [management wants] to make … so that they stay within the law and the policies and procedures the company has in place.”

Indeed, ZipCar’s Goldfinger said he doesn’t look to human resources to provide financial analysis. He wants HR to understand the impact that employees have on the bottom line, how the business works, and what decisions make sense for the business. “Are they as financial minded as finance people? No. Neither are marketers or engineers,” he said.

While Eve is a human resources professional himself, he took Beatty’s side on the issue. There are many HR people who don’t spend enough time understanding the business or creating metrics for the value employees deliver, he said — though many metrics are easy to fashion, such as employee impact on budget, productivity per employee, and even differential economic value between high performers and others. “HR doesn’t have full control over those things, but finance analyzes numbers that it doesn’t control, and HR should be doing that too,” he said.

Beatty said HR departments should focus their efforts on measuring the value created by the company’s strategic talent and by its culture, and on metrics identifying employees as either “top talent,” “emerging talent,” “career level,” or “not a fit with the role requirements anymore.”

The Value of Branding

Beatty’s suggestion that many human resources departments are ill-advised in their focus on branding their companies as “the employer of choice” also drew heat.

Typical of comments posted to the article were, “Who in their right mind would not want to be an employer of choice, especially in today’s economy?” and “If you are not an employer of choice, then why would excited, enthused people want to work for your firm in the first place?”

Beatty said the employer-of-choice position generates an overabundance of candidates, which wastes time and money. Estimates for the cost of processing a job applicant range from a few hundred dollars to thousands of dollars, depending on how far the person gets in the evaluation process, he noted.

Instead, according to Beatty, companies should make clear that they are looking only for the cream of the crop.

But, wondered Erickson, how much cream can you find if your crop is small? “By having fewer candidates to choose from, their quality is going to improve? Really?” she said.


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