At first glance, HR and revenue are in two different leagues. In fact, HR often looks like a bottomless pit that requires continuous investment. Benefits, compliance, training, retention…take a big bite out of the budget without giving anything in return.
Is that really so?
In practice, taking a smart approach to HR can maximize its return on investment (ROI) and turn this part of business operation into a gold mine. All you have to do is empower your biggest asset – employees.
Let’s take a closer look at how HR can drive revenue and help turn your company into an industry leader.
Best Asset vs Weakest Link
Depending on the way you design your HR strategy, employees can either turn into your best asset or become your organization’s weakest link.
Employees can:
- Act as your brand ambassadors
- Give 100% of their effort to the organization’s success
- Contribute to healthy company culture and workplace environment
- Accumulate and share knowledge
- Act motivated and motivate others to get the job done
- Initiate innovation by generating ideas
- Stay with the company for many years and help drive revenue
Just as easily, employees can:
- Create a negative image of your company
- Act disengaged and hinder productivity.
- Focus on different values and avoid building a community
- Take valuable knowledge away with them as they leave.
- Demonstrate detachment and exhaustion
- Avoid any proactive behavior
- Leave the company less than a year after you invest a significant amount in recruiting and onboard
There is only one step between the former and the latter. It’s up to the HR department to prevent it from happening. If you empower your best asset, they can drive revenue. Alternatively, they turn into the weakest link that hinders business operations.
7 Ways HR Can Drive Revenue
Employees are the driving force behind your company’s revenue. No matter how many excellent business decisions you make, poorly managed and unhappy employees can reduce your revenue tremendously. Meanwhile, they can bite a chunk out of your budget, generate fines, initiate lawsuits, and much more.
Here is how HR drives revenue through employees (and more).
1. High-Quality Training
Employees who receive high-quality training become equipped to execute their responsibilities in a much more effective manner than those who don’t. Depending on your industry, even the most qualified candidate may require training to start contributing to the company’s bottom line.
If your HR department invests time and money in arranging high-quality training with each employee’s needs in mind, the workforce can start generating revenue quicker and more efficiently.
Studies show that companies that invest $1,500 in training their workforce can see an average of 24% more profit than those, which invest less. To achieve higher revenue, it’s imperative to arrange relevant training for both new and existing employees.
2. Engagement Tactics
Engaged employees are more productive and loyal. They are less likely to leave the company and more likely to contribute to its success. Gallup’s studies demonstrate that companies that focus on employee engagement achieve 18% higher productivity and 23% higher profitability than those that make less effort.
So, the more time and money you invest in keeping employees engaged, the more money they can help you make. While this sounds simple, engagement rarely is. To improve engagement, you may need to rethink your entire HR strategy, and, yes, invest more money in the process.
3. Higher Motivation
Motivation sounds exciting and productive. That’s because it really is. When employees are motivated, they work better, take fewer sick days, empower other employees, promote your brand, and much more.
Motivation is an essential part of the engagement, which, as you see above, is a major driving force behind productivity and revenue.
Keeping employees motivated doesn’t necessarily require significant expenses. You can:
- Arrange an effective recognition program (a simple “kudos” can do much more than a $500 reward).
- Allow flexible scheduling
- Ask for feedback and share your own
The key to driving employee motivation is showing them the impact they have on the company’s success. So essentially, by showing employees that they can drive revenue, you encourage them to drive more revenue. Win-win.
4. Employer of Choice
Amidst the Great Resignation that’s costing companies millions of dollars annually, it’s becoming harder and harder to position the company as an employer of choice. In a race to get better benefits, higher salaries, and more flexibility, employees jump from one company to another. Businesses are left picking up the pieces that come at an extremely high price.
By positioning your company as an employer of choice, you don’t just reduce turnover. You can attract top talent that your competitors can’t hold on to. A smart approach to HR can help your organization appear attractive even if the competition is fierce by:
- Arranging high-quality training
- Sourcing better benefits options
- Improving work culture
- Boosting motivation
- Increasing engagement
As an employer of choice, you attract and retain top talent, which, in turn, becomes a major revenue-driving force.
5. Employee Satisfaction
Happy employees are productive employees. It’s just that simple. A satisfied employee works more, increases sales, retains clients, and contributes to innovation. This, in turn, drives revenue for your company.
Keeping employees happy isn’t easy. It requires a complex HR strategy that implements personalization, feedback, recognition, work-life balance, and much more. Keep in mind that an increase in salary doesn’t contribute to employee happiness as much as other HR tactics do.
Studies show that happy are 12% more productive. They are also less likely to search for other employment opportunities.
6. Hiring Decisions
Educated hiring decisions contribute to faster onboarding, higher job satisfaction, better motivation, increased engagement, and everything else that can drive revenue. A well-chosen candidate can start increasing your revenue the moment they join the team.
The quality of hiring decisions depends on the HR team’s analytics, tools, interviewing skills, and much more. A wrong hiring decision can cost a company 100% if the new employee’s annual salary. This bites into the HR budget and affects the company’s bottom line.
7. Compliance
HR compliance is a set of complex measures that require continuous monitoring, adjustments, and updates. If you fail to stay compliant, you could face:
- Workers’ comp claims
- Employee lawsuits
- Sizable fines
- Reputation hits
When HR teams have sufficient time and resources to focus on compliance, they don’t just help your company succeed. They prevent significant expenses and contribute to turning your company into the employer of choice.
How to Drive Revenue with HR
Since HR requirements, regulations, and demands change over time, driving revenue becomes somewhat more complicated. The secret to increasing revenue without spending a fortune on HR tactics is personalization.
The more attention you pay to your employees and their needs, the easier it is to design effective revenue-driving practices. Here are just a few.
Ask for Feedback
Asking for feedback by arranging surveys doesn’t cost anything at all. Meanwhile, the information you get is priceless. Employees can tell you exactly what they need to be more productive and drive revenue while staying happy and satisfied with their job.
Dig Deeper
When you arrange training for your employees, it’s imperative to understand exactly what they are lacking. Since training is hardly inexpensive, you can’t have it go to waste.
Find out which skills employees need honing and focus on doing just that. High-quality training assessment drives high-quality results.
Search for Opportunities
No matter how seemingly perfect your HR strategy is, there are always revenue-driving opportunities you are missing. Make it your goal to identify these opportunities and take advantage of them.
To do that, focus on improving employee communication. In many cases, poor communication or lack of transparency hides opportunities and make it impossible to improve productivity.
Discover New Revenue Sources
HR doesn’t just help increase revenue. It can help you discover new revenue sources. Companies that depend on sales to drive revenue often overlook potential revenue-driving resources that remain outside the sales department.
Instead of keeping the entire focus on deskless employees who are on the front lines, HR can turn the attention to the non-sales team members. Some examples, include implementing a referral program or delegating client-facing tactics to non-sales employees.
HR can help you discover the revenue-driving potential in the part of the workforce you never considered. Besides increasing revenue, this can contribute to the company’s growth.
Key Role of Technology in HR-Driven Revenue
As HR is becoming more and more complex, it can’t survive without the right technologies. In fact, driving revenue without the right tech is impossible.
Employee portals, knowledge management software, case management tools, AI-driven skills evaluation, and other technology don’t just take the burden off your HR team. They empower employees, improve satisfaction, and increase productivity.
Refresh is a comprehensive platform that provides HR specialists with a large set of tools that can turn the weakest links into top assets while improving employee satisfaction and driving revenue. To learn how these efficient solutions can benefit your business, please reserve a demo today.