Why are People & Culture Topics Important? They are saving you money!

Often I hear that strategic human resources topics are nice-to-have. Traditional managers share with me that they focus on money first and these 'soft' topics are coming later.

We at Hive17 agree that delivering value to customers is a key activity within any organisation ("the train"). And every organisation also needs to ensure that that delivery is as effective as possible ("the tracks"). This is why we believe that enabling teams to give their best is so important. And let's explain this in money terms.

Let's share here how people & culture topics (the strategic HR themes that enable teams to give their best) are benefiting organisations. There are three main areas:

• Aligning with a shared direction - especially with inert employees it is important to bring them onboard with a meaningful vision that is aligned with their own beliefs; further, it is crucial that the efforts within the company are bundled into the same direction to increase synergy effects.
• Engagement with clarity - based on a shared direction, it is then important that your people understand how they can contribute to the objectives within their daily jobs; and provide regular guidance on how these goals are achieved; and let's also keep celebrating the results along the way.
• Talent attraction - based on this engagement, we need to go further and understand what our employees need to be effective and allow them to unleash their potential; this means cultivating relationship  and the right behaviours on all levels of the organisation.

Ok, you might know these benefits of creating the right HR practices within your organisation. How does it impact my cost? Let's look at three different items:

• Reduced attrition - every person that voluntarily leaves your organisation and needs to be replaced occurs at the cost of 60'000 SGD per person. This includes the cash-out cost of hiring and training the new person; it also includes the lower productivity of the leaving person and the new hire. And this disruption also impacts the morale and productivity of the people in the team.
• Higher productivity - when people are inert and are not clear about where to put their efforts, we are losing out on productivity. Providing direction and engaging them towards this direction will unleash their potential and allow the organisation to create more value for their customers. In our experience, this can add about 10% productive hours. In the context of Singapore, this means you can save about 70'000 SGD per year for each team.
• Stress-related cost - when people work in an environment that is unclear, ambiguous, and driven by micro-management, people feel stressed. This has clearly an impact on health and on productivity again. A recent study from last year suggests that anxiety and depression are costing Singapore nearly 16 billion SGD in lost productivity annually. Your employees might contribute to this figure.

What are now strategic HR topics? How can I transform my people and my culture? Here is a list of initiatives we suggest to look at: vision-to-action, target setting, lean & agility practices, talent management, value implementation, organisational structure, collaboration principles, conflict management.

Where do you see your biggest improvement opportunity?


Sources:

• Employee Turnover Costs - The Silent Profit Killer
• Engaging with Talents - what are the quantitative benefits?
• The hidden cost of stress: How it impacts your health and finances

Engage Hive17 as your sparring partner for people & culture initiatives.