Your new high-potential development programme is about to launch, but then comes news that it is time — yet again — for HR to report its contribution to enterprise-wide cost-optimisation efforts. Some HR leaders will be tempted to scrap the programme to cut costs, but that is a knee-jerk reaction that prematurely and unwisely moves good, strategy-driven ideas to the back burner.
“Successful HR leaders focus on cost optimisation as an ongoing discipline, not as a one-off exercise,” says Gartner senior executive advisor Matthias Graf. “Cost optimisation strategies should look beyond cost-cutting and proactively promote options for immediate efficiency gains while not compromising on long-term impact on business performance..”
A more effective approach is for HR to focus cost optimisation strategies around three areas:
1. HR service delivery: Optimise the HR service delivery model, governance structure, processes and roles
2. HR spend: Rationalise spend for shared services, HR information system (HRIS) technology and outsourced vs. insourced services
3. Workforce costs: Optimise via smart total rewards models, workforce structure and layoff management
The first two areas focus on cost-saving efforts within the HR department, while the third is aimed at HR’s contribution to cost optimisation across the organisation.
These 10 recommended ideas around these three areas will help initiate cost optimisation efforts within the HR function and the enterprise.
Learn more: What Employees Think About Cost Optimisation