How to Build a Business Case For a New Hire
We live in a work culture where “being busy” is glorified. As company budgets get tighter, and ambitions rise higher, the word “busy” can become synonymous with “over-worked.”
Many of us regularly leave work with a never-ending to-do list. Overworked employees are more stressed, and often less productive, which negatively impacts profitability.
But if we say it’s time to hire more staff, or out-source part of our to-do list, chances are, the C-suite will see it as a cost-item. They will also want a statistics-based rationale (since salaries are usually a large company expenditure).
Building a “C-suite ready” business case that connects hiring/out-sourcing to profitability may seem like a daunting task, but its returns can be manifold. Here is a step-by-step guide with input from some leading HR and performance management experts.
Step 1: Audit and quantify the staff’s workload
“To make the case that you need to hire someone or outsource a task, you must prove how your plan makes the team’s existing workload more efficient,” advises Adrian Travis, performance management expert and principal, Trindent Management Consulting Inc.
He recommends undertaking a process called workload quantification. “Calculate your work-time relationship. For example: ask employees how much time they are spending on different tasks. Is each employee’s workload equally distributed? How many people do you really need for this job?”
Efficiency expert and Principal of Vine & Associates, Leslie Vine agrees. “Such an audit can help identify where the actual needs are, and can point to where the company can improve,” she says.
Step 2: Align with the organization’s strategic direction and cite real data
According to Laura Croucher, Partner, Advisory Services, KPMG Canada and National Service Line Leader for People and Change, HR leaders need to generate value for their function in the greater business context for real success.
“Engage peers at the leadership level of your organization and get their input and feedback on your people management strategy,” says Croucher. “Talk to your customer service manager, operations manager, etc., start to speak their language, and ensure your strategy is delivering on their particular business functions.”
To give your business case proper grounding relative to financial metrics, Croucher suggests, the hiring/outsourcing strategy must be based on real information from real data.
“Your HR function must be fully aligned with other leadership teams, so you are all working towards one common vision together,” she says.
Step 3: Focus on revenue impact
Consider: what are your overtime costs for existing employees? What are your telecommunications costs for remote workers? Identify the critical workforce segment that is contributing most to your organization, and examine how you can engage, develop and retain them with the proper support.
“Recruiting costs can become a distraction, so it’s important to focus on the ROI of each new hire,” says Joy Pridie, Senior Manager of Human Capital at Deloitte Canada. “Consider how you can increase shareholder value, and pick recruitment metrics within those areas.”
Revenue that each employee can generate is a simple but important metric that can set internal benchmarks. Quality and speed of service are also impactful as they measure efficiency.
Beyond that, go back to your organization’s strategic direction. “Improving your team’s competency development could become a competitive advantage for your company,” Pridie adds. “And employee engagement can be important too, as it can be proportional to business performance.”
“Your financial picture should be based on the total charge,” explains Pridie. “Analyze impacts on operational stability, business continuity, and alignment of incentives within the organization.”
Workforce planning is becoming increasingly critical in terms of attracting business and retaining clients. Building a business case using the steps above can help C-suites move hiring initiatives from the “cost column” to the “profit column.”
The article above was originally posted on March 7, 2013, on Workopolis.