From Cost-Cutting to Revenue Generating: Driving Strategic HR

Anyone who has spent much time here at TLNT probably knows that San Francisco State business professor Dr. John Sullivan has a lot to day about the state of talent management and HR.

In fact, Dr. John’s post on The Top 50 Problems With Performance Appraisals was TLNT’s most well-read article in 2011 — and that says as much about the great insights and thinking he brings to the table as much as it does the subject matter.

Whether you agree with him or not, Dr. John Sullivan is a provocative and forward-thinking knowledge leader who has a lot to say about HR.

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And, that’s why his article today on TLNT’s sister website ERE.net is sure to be one that both engages talent managers AND gets a debate going about the state of HR practices. Here’s what he says:

HR and talent management leaders are constantly striving to become more strategic. But more often than not it seems that when they are presented with a strategic alternative that really breaks new ground, they retreat and stick with the status quo. However, if you are serious about making a strategic impact and you take a minute to reflect, it’s hard to think of many things that could have more of a strategic impact than increasing corporate revenues.

This is because increasing revenue or “topline growth” is on every CEO’s agenda and it is also almost always a top corporate goal and an executive success measure. …

HR has historically focused exclusively on cost cutting, but realize that increasing revenue is a far superior goal. That is because almost anyone can cut costs using an arbitrary number. However, in order to generate more revenue in the marketplace from your customers, you must meet a much higher standard, which requires that you be competitive in every aspect of the business.

Now if you are an HR traditionalist or someone who is happy to maintain HR’s status as a service/overhead function, you are probably already thinking that a strategic goal to impact revenue is a ridiculous idea. However, you would be wrong. We know that HR can directly increase revenues because several firms have already succeeded in demonstrating to their CFOs that they could directly increase revenue. At least take a minute and look at a quick example where HR has increased revenue.”

HR as a revenue-generating part of a business? Yes, this is a provocative idea that’s worth taking a good look at. The question is — is this an idea whose time has come?

For more on this article by Dr. John Sullivan about HR as a revenue-generating function, click here. 

John Hollon is Editor-at-Large at ERE Media and was the founding Editor of TLNT.com. A longtime newspaper, magazine, and business journal editor, John has deep roots in the talent management space. He's the former Editor of Workforce Management magazine and workforce.com, served as Editor of RecruitingDaily, and was Vice President for Content at HR technology firm Checkster. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices, including for the popular Fistful of Talent blog. Contact him at johnhollon@ere.net, connect with him on LinkedIn, or follow him on Twitter @johnhollon.

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1 Comment on “From Cost-Cutting to Revenue Generating: Driving Strategic HR

  1. John Sullivan is always a breath of fresh air.   He, Peter Capelli and John Boudreau are so forward-thinking.   To think of HR as a revenue generator should shake up everyone in HR!

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