In Praise of The Human Resources Professional

HR professionals save money | BCBusiness
Competent human resource professionals can save money by helping companies avoid costly legal claims.

The Legalist reminds us that competent HR staff members can add value to companies, protect employers from lawsuits and cut costs in the long run.

My practice frequently involves helping companies with actual or potential claims against or from former employees. Unfortunately for these clients, by the time a claim arises, their options are limited to “damage control,” — essentially just controlling the costs and consequences. 

Most companies with large numbers of employees recognize the benefits of having at least one human resources professional on staff. Companies whose payroll represents their single largest operating expense understand the value of having an HR professional to help manage costs and ensure HR strategies are aligned with the company’s overall business strategies. 

What is not so obvious, especially for smaller or new companies, is how HR professionals can contribute to a company’s bottom line by avoiding costs associated with potential legal claims and a number of other circumstances.

When buying, selling or reorganizing (downsizing) a business, how employees are treated (during and after the process) will impact productivity, customer service, benefit costs and severance costs. Having a sound HR strategy before, during and after such transactions will save costs, including those associated with employee turnover.  Companies can often lose key employees who accept other opportunities they may not have considered without the uncertainty created during the process.

HR professionals ensure their organizations have policies in place (and ensure employees know about and understand such policies) that:

• protect their intellectual property and confidential business information;
• explains and manages conflicts of interest and expected standards of ethical behaviour; and
• sets standards for respectful workplaces, which are free from bullying, harassment and discrimination.

HR professionals also play a key role in setting up programs aligned with the company’s culture and business that encourage excellence in employee performance and identify and manage performance problems early before they impact the company and become costly to resolve.

If companies have HR professionals to implement the strategies noted above, they will also avoid, or at least minimize, the costs incurred once a legal claim arises because of:

• increased severance costs once opportunities to manage attrition and redundancies have long passed;
• disclosure and misuse of confidential and proprietary business information;
• loss of reputation and business opportunities from failure to implement conflict of interest policies, or from employees who do not understand their common law obligations of loyalty and fidelity;
• breaches of rights protected by human rights laws, including failure to properly accommodate employees with disabilities;
• toxic workplaces where bullying or harassment goes unnoticed, or is not reported or checked; and
• large severance costs for employees whose performance issues were not addressed for numerous years, or not addressed in a way that allows an employer to terminate for just cause.

Besides contributing to a productive and engaged workforce, HR professionals are key to avoiding costly claims and legal expenses. Thus it makes good business sense for companies to engage HR professionals, either as full time and key members of the organization, or on a consulting basis if the business size and stage cannot justify a full-time role.