• Sign in
  • 0Shopping Cart
  • Solutions
        • High value indicators
        • Up-skilling HR to work data driven
        • HR of the future
        • Best Practice Nuggets
        • Special Offer
        • SOLUTIONS

          After more than 20 years of research we know what it takes to be a top performer in people management. Our solutions focus on ‘what moves the needle most’ in people management – from creating a high value dashboard to establishing the MUST in every HR process. Everything tied to monetary impact being able to prove the value the HR function creates and highlighting line management accountability. Following best practices creates impressive results on all levels.
  • Live online academy
        • Overview
        • HR working data driven
        • Best Practice Nuggets
        • Certificates
        • Description

          After up-skilling and coaching thousands of HR professionals in Fortune 500 companies to work number driven and putting a price tag on a problem, our programs are also available to you in our live online academy. Every year HR professionals participate in our academy worldwide either as company in-house seminars or in one of our live online up-skilling courses.
  • Featured Insights
  • Community
        • Live specials online
        • Blog
        • Post your question
        • Newsletter
        • Register
        • Sign In
        • Community

          Welcome to our community "HR working data driven". The main purpose it to share, explore and support HR professionals in working number driven. Take part in one of our weekly live specials, read our insights or post a question and get an answer from our members and coaches about a specific topis. If you want to join please sign in and become a member.
  • About us
        • Careers
        • Contact
  • Menu Menu
Featured insights

Changing the playing field – How to defend against purely cost-cutting initiatives

4 min read

Many consulting firms focus on streamlining transactional HR with pure cost focus – perceiving HR as a well-oiled delivery machine. 

May 12, 2022inFeatured insights

Changing the playing field

Changing the playing field: Most value is generated where HR provides processes, tools and coaching — but line management has the accountability to execute. A thorough evaluation involves all people management processes and looks rather for top line potential (not only focusing on the HR function itself). All organisations are unique and an analysis should always be context sensitive

The cheaper the better approach

During cost cutting/lean projects many organisations hire large consulting firms to analyse different supporting functions (including HR). Their approach is rather straightforward. They view the HR function as a well-oiled machine and filter out 80% of the value creation potential; areas like performance management, most development activities, talent management, strategic workforce planning, employee engagement, etc. are not emphasised. Their focus is purely on economising headcounts, costs per paycheck and streamlining transactional HR without context sensitivity. The main message is: ‘The cheaper the better!’

The top line potential is very high and this normally makes the difference — making companies successful & competitive.

But looking only at transactional/administrational structures and processes doesn’t create much value. As shown in the graph, most value is generated in the upper right corner – where HR sets up the processes and provides tools to be executed by line management. The top line potential is very high and this normally makes the difference — and companies successful and competitive.

A thorough evaluation has to involve all people management processes – regardless of who is performing them – and it needs to look (beside bottom line) mainly for top-line potential. This means process efficiency is less interesting than the impact a process has – using high value metrics rather than old world adherence reporting is key. You can run a process in the most lean and efficient way but still generating bad results.

Different steps in each organisation

On top all organisations are unique; they are in different steps of their life cycles and face different challenges. For example, if your annual growth is 15%, HR has to be staffed 1 to 2 years in advance to manage this growth. This would not be considered in a pure cost cutting exercise. Furthermore, many organisations have structures that require a business partner in smaller units, which could make the whole group seem overstaffed.

But you cannot work with 0.15 FTEs. In addition, the staffing of the HR function is also very much dependent on the maturity level of line management and IT systems – hardly anyone takes that into account.

F-Top Institute

Poststrasse 30
CH – 6300 Zug
Switzerland
info@ftop.ch
Phone: +41 41 769 80 30

F-Top Institute

Nørregade 33
DK – 1165 Copenhagen K
Denmark
info@ftop.ch
Phone: +45 2670 0602

Information

  • Terms of use
  • Privacy Policy
  • Cookie Policy
  • Recruitment Privacy Notice
7 Pitfalls to avoid in BenchmarkingThe power of multi-metric data analysis
Scroll to top