| If a company could get verifiable human resources | | | | necessary to prevent potentially devastating losses |
| expertise, services and products for a reasonable | | | | there. |
| investment, and the mission was to assist in going | | | | And last but not least, leveraging employees |
| after some of the profits being left on the table, and | | | | resources, especially at the top can keep your vision |
| proactively work to minimize the chances of the | | | | on track. When looking at the contribution human |
| disaster happening would that be a sound business | | | | resources is capable of making I think we need to |
| decision? | | | | view the function in a similar light of our other |
| This is the first in a seven part series which will explore | | | | trustedadvisors. |
| how human resources can have a significant and | | | | Your CPA firm is your trusted advisor in all matters |
| measurable impact on a small business and | | | | related to the financial aspect of your business. The |
| shareholder value. Our mission will be as follows: To | | | | same is true of your law firm related to all things legal. |
| improve Shareholder Value (or Business Owner | | | | To enjoy the full benefits that human resources has to |
| Wealth Accumulation) in our Client Companies by | | | | offer I would suggest that a similar arrangement needs |
| delivering Human Resource Services in a strategic | | | | to occur. |
| manner that impact each Client's Profitability and | | | | By understanding the company's goals and strategies, |
| Business Value. | | | | and getting a grasp of what possible human resource |
| To accomplish this lofty goal it is useful to introduce the | | | | problems are present, we can design strategies and |
| following model: The key to providing this kind of | | | | tactics to accomplish those strategies and fix those |
| shareholder value is to first determine theleverage | | | | problems. Why bother fixing the problem at all? How |
| points where human resources can add real value. | | | | much could this possibly cost me? Again, fair questions |
| These include: | | | | so let me provide a quick example. Let's look at the |
| Turnover: the real cost drain is usually much larger than | | | | following company. |
| most companies understand | | | | 30 Employee Company |
| Inability to attract top quality employees can | | | | $5,000,000 Annual Revenue |
| significantly hold back a | | | | Net Profit 8% equals $400,000 per year |
| company's financial | | | | If we could raise current productivity from 70% to |
| growth. | | | | 100% the total increase in profits would be $600,000 |
| Employee Productivity and Performance: monitoring | | | | over a five year period. Impossible you say? Of |
| and improving this can have a big financial upside | | | | course it is because we are dealing with people and |
| Additionally there are some direct Employment Costs | | | | 100% is not achievable. But what about 80%, 85%? |
| that warrant Long Term Cost Containment initiatives | | | | In the next article we will look at Asset Protection |
| While we can't operate without employees, they also | | | | Strategies and ways that human resources can add |
| pose a huge liability, so Asset Protection strategies are | | | | value and PROFITS to your business. |