How HR can gain more recognition for their work: shattering the “cost centre” myth

How HR can gain more recognition for their work in summary:

• Despite their pivotal role in successful organisations, our research has revealed HR still struggles to receive any recognition for their work or accomplishments.
• This lack of recognition can lead to hugely damaging side effects within a business, not least within HR.
• To change this, HR must make better use of data, educate and advocate, collaborate and foster a culture of organisational recognition.

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For too long, HR has been unfairly viewed as a mere administrative department or, worse, a ‘cost centre’.

This perception not only stifles morale and appreciation for HR professionals, but also hinders the organisation’s ability to capitalise on the strategic value HR brings.

For example, our recent research report, “It’s All HR’s Fault,” revealed a stark reality: 41% of HR professionals rarely receive recognition for their work, with 13% never having received any recognition at all.

Of course, that must change. But, how did we get here? And how can this situation be changed for the better?

Why HR gets undervalued: breaking down the barriers

HR often finds itself struggling for recognition, despite its essential role within successful organisations. There are several factors that contribute to this undervaluing, including:

The “Nay-Sayer” Stigma

Let’s face it, HR policies aren’t always sunshine and rainbows. Dealing with disciplinary issues, enforcing regulations, and saying “no” to unreasonable requests… They can all add up to create an image of HR as the department of limitations.

Our research suggests that HR teams themselves sense this, with 83% responding ‘yes’ to the question ‘Do you think employees have a negative perception of HR?’ This perception stems from our natural aversion to being told what to do, especially when it comes to workplace interactions. It’s easy to forget that these policies exist to protect both the organisation and its employees, fostering a fair and safe work environment.

Lost in the Administrative Maze

Many HR teams, unfortunately, get bogged down in the day-to-day tactical tasks of payroll, paperwork, and compliance. While these duties are crucial, they can overshadow the strategic value HR brings to the table.

Focusing solely on “tweaking HR tactical processes” fails to demonstrate the impact HR can have on talent development, workforce planning, and ultimately, the organisation’s bottom line.

Communication breakdowns

If the C-suite and other departments aren’t aware of HR’s contributions to key metrics and goals, it’s easy to dismiss them as simply an administrative cost centre. Proactive communication and data-driven reporting are crucial to bridge this gap.

As McKinsey points out, showcasing the positive impact of HR initiatives on employee engagement, retention, and overall performance can shift perceptions and demonstrate the department’s strategic relevance.

The ripple effect: why undervaluing HR hurts the whole business

While feeling underappreciated might be the immediate consequence for HR professionals themselves, the true impact of neglecting their value extends far beyond their morale. When HR’s strategic role is ignored, the entire organisation suffers in several key ways:

Talent acquisition and retention woes

A thriving organisation hinges on attracting and retaining top talent. But if HR is seen as simply the “rules police” and its efforts undervalued, a negative company culture will be the result. Added to that, a weak and undervalued HR department can significantly hinder recruitment efforts, making it harder to attract promising candidates.

Additionally, neglecting employee experience and engagement, areas where HR plays a crucial role, leads to high turnover rates. This revolving door not only disrupts team dynamics and productivity but also incurs significant costs associated with recruitment and onboarding.

According to NerdWallet, the real cost of hiring a full-time employee on a base salary of £32,000 in the UK is actually more like £81,000, when you factor in recruitment costs, onboarding and more. Having a strong and strategic HR function, that helps reduce employee turnover, therefore has a significant impact on the business’s bottom line.

Missed strategic opportunities

HR isn’t just about paperwork and policies. An organisation’s success demands a strategic powerhouse equipped with unique expertise in critical areas.

When trusted and empowered, HR can take ownership of the company’s purpose and mission, and make it a reality on the ground. Getting more granular, workforce planning ensures you have the right talent in the right place at the right time, aligning your human capital with evolving business needs. This means you’ll need to analyse industry trends, predict future skill requirements, and proactively develop your workforce.

With strategic talent management sidelined, organisations miss out on crucial opportunities to adapt, innovate, and stay ahead of the curve.

Disengaged employees = diminished profits

Engaged employees are productive employees. Organisations with a positive employee experience, fostered by strong HR initiatives, are 1.3 times more likely to report organisational outperformance, according to McKinsey.

However, undervaluing HR hinders its ability to focus on employee engagement, leading to disengaged and unproductive teams. Employees who feel unappreciated and unsupported are less likely to go the extra mile, exhibit lower levels of innovation, and are more susceptible to burnout. This translates to decreased productivity, higher absenteeism, and ultimately, lost profits for the organisation.

Becoming strategic partners: How HR can gain more recognition for their work

To break free from their outdated image and claim their rightful place as strategic partners, HR teams must proactively address how they’re perceived and the value they bring. If you’re an HR professional looking to gain more recognition for your work, here are four key steps to take:

1. Speak the language of numbers:

Data is the currency of business, and HR needs to become fluent in it. Quantify your impact by tracking key metrics like employee retention rates, eNPS scores, and training effectiveness. Make the most of your HR software to gather accurate data across the employee lifecycle, from recruitment to succession planning. And perhaps most importantly, get comfortable with numbers and metrics.

2. Educate and advocate

HR can gain more recognition by proactively taking it. So, regularly communicate HR’s strategic contributions to the C-suite. Use all the data and metrics from step one to build a compelling narrative showcasing how HR supports talent acquisition, workforce planning, and employee engagement – all critical factors for sustainable business success.

Highlight how your initiatives directly align with the organisation’s goals and contribute to the bottom line. Remember, leadership doesn’t always have full visibility into HR’s efforts. It’s your responsibility to educate them and advocate for your department’s strategic role.

3. Collaborate, don’t isolate

Breaking down silos and fostering cross-functional collaboration is crucial. Partner with other departments on projects, share information, and actively seek their input. For example, collaborate with marketing to ensure recruitment messaging aligns with your brand values, attracting top talent who resonate with your culture.

That not only demonstrates HR’s understanding of broader business goals but also builds trust and appreciation from other departments.

4. Celebrate success and foster recognition

Building a culture of appreciation within the HR team itself is essential. Encourage peer-to-peer recognition and celebrate individual and team achievements. This boosts morale, fosters collaboration, and creates a positive work environment where everyone feels valued. Remember, a happy and motivated HR team is more likely to translate that energy and enthusiasm into impactful work.

By implementing these steps, HR teams can shed the “cost centre” label and claim their rightful place as strategic partners. HR teams can earn the recognition they deserve. And, more importantly, continue to significantly contribute to the overall success and sustainability of the organisation.

Remember, you as an HR professional have a lot to bring to the table. By strategically leveraging your expertise, you’ll make a positive impact in driving change and propelling the business forward.

Ready to unlock the full potential of your HR function?

Cezanne’s HR software empowers you with the tools and insights you need to demonstrate your impact, gain recognition, and build a thriving workforce. Contact us today to learn more.