Sep 30, 2013 | Blog

Retention as a Service

Optimize Your Talent Strategy

Out of all the people I know and/or have talked with via DriveThruHR or my conferences travels, I've only met one person that works in HR (in his case recruiting) that has ever created a profit center within HR/ recruiting.  Not a cost neutral center - an actual profit center.  You know, where they made more money than they spent.  So on one hand you have to be wondering... why don't I know smarter people?  Right?

 

This "profit center" think got me thinking... what if HR charged for all of our services?  What if HR charged other parts of the business for what they consume, etc.?  In theory, we would cover our costs and charge a nominal profit.  Upside: this would cut out all the ineffective programs and/or general waste that plague most HR departments.  I'm assuming that folks wouldn't waste our time if they were being charged an hourly rate - especially a high hourly rate. 

 

Let's walk this dog.

 

For this to work, obviously some things need to be centralized, but most could be personalized to the needs of managers, business units, divisions, departments, etc.  If one department wants to invest more in performance management... great.  If one line manager wants us to try some crazy recruiting tactic and is willing to invest in it… great.  In theory, we would charge people for exactly what they think they need, moreover, what they are willing to pay for.  And at the end of the day, if a program doesn't go well, they’re wasting their money not ours. 

 

I know what you're thinking.  Beyond the I think William has gone crazy part.  You think this would bring more chaos, maybe unnecessary chaos, to the organizations we serve.  Maybe, or maybe it will force us to become more nimble, proactively selling products and processes internally that we really believe in.  Note the emphasis on "sales," as I think that market condition cuts out all the noise and inefficiently.  If we can't sell it, the market would be telling us something.  And maybe that's what we need... a strong dose of reality rather than hope.

 

Just maybe the reason we're still talking about a "seat at the table" is that we're now and have always been thought of as a cost center.  I know, I know, we do reduce waste and we do mitigate risk and cost savings to help our firms.  I get that.  And, I’m beaten by the furniture reference as well but you get the point.  People that talk about profit are cool… maybe even cooler than the coolest people in HR.  “HR made $X this quarter.”  How great would that feel, to be able to look our peers in the eyes and talk about profit?  Okay, still not buying?  I was prepared for that.

 

This is serious so please take a moment and write down the 10 things you are delivering to the organization this week.  Think of these as deliverables.  It doesn't matter how small or big... 10 things.  Put two columns next to those items.  Label one with a $ and the other with Y/N.  This is just between us. With each of the 10 items, ask yourself the question: if I were an independent consultant, meaning someone external to the firm, would the company buy this deliverable?  Yes or no? And, if so, what would they realistically spend on said activity?

 

Are you working on valuable initiatives?  Could HR ever be a profit center at your organization?  I’m not sure.  I'm really interested to see what results you come up with.  Privately - email me (william@tincup.com) and/or publicly note them in the comments section.

 

Final note: If I were running a department in a firm that had a model like this, I'd pay HR for Retention as a Service.  I'd pay top dollar to be able to retain my best employees.  That I know… I would buy that service.   

 

William is the CEO of HR consultancy Tincup & Co.

 

William is one of the country’s leading thinkers on social media application for human resources, an expert on adoption of HR technology and damn fine marketer.  William has been blogging about HR related issues since 2007.  He’s a contributor to Fistful of Talent, HRTechEurope and HRExaminer and also co-hosts a daily HR podcast called DriveThruHR.  Tweet him @williamtincup and check him out on Facebook and LinkedIn.  Not up to speed in the social media game? Reach out via email.

 

William serves on the Board of Advisors for Smarterer, Insynctive, Causecast, Work4Labs, PeopleReport, Jurify, AppLearn, StrengthsInsight, The Workforce Institute, PeopleMatter, SmartRecruiters, Ajax Workforce Marketing and is a 2013 Council Member for The Candidate Experience Awards.  He also serves on the Board of Directors for Chequed. 

 

William is a graduate of the University of Alabama of Birmingham with a BA in Art History.  He also earned a MA from the University of Arizona and a MBA from Case Western Reserve University.