Generally, HR Department is a Cost Centre. How can we make it a Profit Centre ? Can anyone suggest some methods for the same ! Regards, Sheela Sirish
From India, Hyderabad
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From India, Hyderabad
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Hello Sheela:
Generally, the HR Department is considered a Cost Centre.
HR Departments generally save more money than they cost, which makes them a profit center.
How can we make it a Profit Centre?
Do a detailed analysis of all the costs and benefits of the HR Department. Costs are the easiest to calculate, whereas the benefits are more challenging.
Can anyone suggest some methods for the same?
Is this for school or work?
From United States, Chelsea
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45Generally, the HR Department is considered a Cost Centre.
HR Departments generally save more money than they cost, which makes them a profit center.
How can we make it a Profit Centre?
Do a detailed analysis of all the costs and benefits of the HR Department. Costs are the easiest to calculate, whereas the benefits are more challenging.
Can anyone suggest some methods for the same?
Is this for school or work?
From United States, Chelsea
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Hi,
In general, the HR department cannot bring in profit or revenue generation like other Marketing or Software departments. However, it can certainly save costs, reduce expenses, and contribute to profit generation. For example, by reducing the costs involved in hiring, decreasing employee turnover, and aligning HR policies and plans with the business objectives.
Thank you.
From India, Varkkallai
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In general, the HR department cannot bring in profit or revenue generation like other Marketing or Software departments. However, it can certainly save costs, reduce expenses, and contribute to profit generation. For example, by reducing the costs involved in hiring, decreasing employee turnover, and aligning HR policies and plans with the business objectives.
Thank you.
From India, Varkkallai
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Hi,
I do agree that the HR department is a cost center, but in some way, we help the company save its funds, which indirectly can be treated as a profit. Getting good resources for less pay, taking care of them, retaining them, and motivating them all lead to saving the company money.
Regards,
Kiran Kumar
From India, Hyderabad
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I do agree that the HR department is a cost center, but in some way, we help the company save its funds, which indirectly can be treated as a profit. Getting good resources for less pay, taking care of them, retaining them, and motivating them all lead to saving the company money.
Regards,
Kiran Kumar
From India, Hyderabad
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Hello,
Thank you, I am looking at responses that will help me make a presentation to my Senior Management that HR can be a Profit Centre! I am sure there are ways to do this!
Thanks and regards,
Sheela Sirish
From India, Hyderabad
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Thank you, I am looking at responses that will help me make a presentation to my Senior Management that HR can be a Profit Centre! I am sure there are ways to do this!
Thanks and regards,
Sheela Sirish
From India, Hyderabad
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HR is always considered as the cost center if we keep emphasizing on the traditional HR role. HR is undergoing an evolution whereby still maintaining the function of traditional HR function, the HR now is more of a strategic partner and change agent.
Being a Strategic HR partner, we have to gear the whole human resource in the company to meet the company objectives, missions, and visions. A modern HR should possess the criteria of business acumen to champion HR planning, change in HR policies, and also cost reduction by using outsourcing, etc. HR should also be an advocate for both the employees and employers.
Guess that you can work out some strategies for your company so that you will now be in a more proactive position rather than the usual reactive position.
From Singapore, Singapore
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Being a Strategic HR partner, we have to gear the whole human resource in the company to meet the company objectives, missions, and visions. A modern HR should possess the criteria of business acumen to champion HR planning, change in HR policies, and also cost reduction by using outsourcing, etc. HR should also be an advocate for both the employees and employers.
Guess that you can work out some strategies for your company so that you will now be in a more proactive position rather than the usual reactive position.
From Singapore, Singapore
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The perception that HR is a cost center is misplaced. Every department, be it production, marketing, finance, etc., incurs costs while performing their functions. Likewise, HR also incurs costs while performing HR functions.
The HR functions, if not performed in an organization, how is the organization going to be impacted? The impact ought to be negative from the bottom line perspective of the organization. The consequent fall in profit (or increase in loss) is the quantitative contribution by HR in the business.
Jacob
From China, Beijing
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The HR functions, if not performed in an organization, how is the organization going to be impacted? The impact ought to be negative from the bottom line perspective of the organization. The consequent fall in profit (or increase in loss) is the quantitative contribution by HR in the business.
Jacob
From China, Beijing
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If one reads any Talent Management books written by Americans, it is clearly evident that profit is generated by talented individuals, the locating of which is the primary purpose of HR; so much so that it is said that Talent Management is not the prerogative of HR department alone.
Talent Management has to be practiced correctly at all levels in the organization. Unfortunately, the talent available in other teams is not clearly visible as in a transparent medium like cricket where talent of all teams can be clearly seen. The more correct initiative that HR takes in Talent Management, it will not only be a profit center but as a strategic resource, another bane associated with HR.
From India, New Delhi
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Talent Management has to be practiced correctly at all levels in the organization. Unfortunately, the talent available in other teams is not clearly visible as in a transparent medium like cricket where talent of all teams can be clearly seen. The more correct initiative that HR takes in Talent Management, it will not only be a profit center but as a strategic resource, another bane associated with HR.
From India, New Delhi
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Hi,
Please refer to the link: [Is HR cost effective](https://www.citehr.com/114204-hr-cost-effective.html). Hope that your query is resolved.
Regards,
Shweta
From India, Coimbatore
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Please refer to the link: [Is HR cost effective](https://www.citehr.com/114204-hr-cost-effective.html). Hope that your query is resolved.
Regards,
Shweta
From India, Coimbatore
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Hi All,
HR being cost-effective is different from it being a profit center. HR being cost-effective has been on the cards for a long time now. Does anyone know how HR can be a profit center, i.e., revenue-generating? I have heard that there have been companies that have successfully implemented profit-generating programs. Does anyone have any ideas on this?
Regards,
Christina
From India, Thiruvananthapuram
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HR being cost-effective is different from it being a profit center. HR being cost-effective has been on the cards for a long time now. Does anyone know how HR can be a profit center, i.e., revenue-generating? I have heard that there have been companies that have successfully implemented profit-generating programs. Does anyone have any ideas on this?
Regards,
Christina
From India, Thiruvananthapuram
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