Owners of small and mid-sized businesses often face tough choices with regard to their operating budgets. This dilemma might lead you to concentrating too many tasks into one department, or even attempting to juggle it all yourself. While this pioneering mindset is admirable, setting aside your HR needs could be a costly mistake in the long run.
Let’s break down the two primary ways that a solid HR program will benefit your business, and help you to grow.
HR saves you money.
An experienced human resources department can help you detangle the web of costs and penalties associated with having employees. For example….
- The potential cost of lost productivity, rehiring, onboarding and training expenses from one bad hire: $50,000
- The potential penalty for wage and hour violation under the Fair Labor Standards Act: $10,000
- The potential cost of each Occupational Safety and Health (OSHA) violation: $7,000
And these are just a few examples of the liabilities faced by business owners. That’s why each dollar invested in HR saves 10 dollars in long-term investigation and litigation costs.
A good HR program can even make you money.
A key goal of an effective HR program is to successfully engage employees and boost productivity. But how do those goals translate to your bottom line? According to researchers at Cornell University, a review of several hundred companies found that those who invested in key HR practices saw…
- A 22 percent boost in sales growth
- 23 percent faster profit growth
- Turnover decreased by 67 percent
They also found that these companies enjoyed…
- Greater customer retention
- Higher productivity
- More operating income
- Increase in referrals
- Lower employee absenteeism
- Fewer safety incidents
Contact us to learn more about establishing an effective human resources program. It’s not as difficult as you might believe, and the benefits speak for themselves.
Sources for stats:
St Cloud University