Most CFOs don't think HR affects the bottom line — and half of HR leaders agree
- HR doesn't impact businesses' bottom lines, according to 61% of CFOs surveyed by Paycor. Almost half of HR leaders in the survey (49%) said they agree. The survey, 2019 Report: People Management, polled 700 leaders, including HR directors, CEOs and CFOs at small to midsize businesses.
- The report revealed that 43% of organizations don't track the costs to recruit, hire and onboard new employees. Without that information, leaders may underestimate how much turnover costs them. The 2017 national average cost to hire a new employee was almost $4,500, the study said, citing data from the Society for Human Resource Management. Employees said burnout, bad bosses and lack of recognition cause workers to quit. C-suite members said compensation, lack of career advancement opportunities, poor performance and mismatched person or job make up the top motivations to quit.
- In the third tier of the report, which focused on compliance, more than half (52%) of small businesses said they spend too much time complying with laws and regulations, and one-third said they don't know how often they audit their compliance practices.
As its strategic role expands, HR can expect to encounter some growing pains. A recent study by Paychex found that 80% of HR professionals at small to midsize businesses feel they have a say in and contribute to their organization's total strategy. The survey also revealed that HR employees prioritize tasks related to training and development and company culture. Within firms where HR is still moving into these arenas, other company leaders may be slow to recognize the department's growth and importance.
But this problem isn't necessarily the fault of those other leaders, at least not totally. Another study revealed the most common blindspots of an HR department. The study concluded that HR takes for granted relationships with senior leaders and forgets to invest the time needed to gain and keep their support. If HR fails to communicate its growth and secure the support of other departments, it's not surprising that its identity as a strategic branch may go under-recognized.