Why HR should make Business Cases?

When you first read the topic , does it seems as though the profession is heading towards a paradoxical ( not paradigm) shift? In the past, there were hardly any instances of HR having to make a business case to the Board or CEO or senior management – which in essence means that today’s HR professional across levels has a clear understanding of the fact that each people related intervention also needs to have a cost-benefits analysis done, a feasibility or viability exercised conducted, senior management buy-in and clear linkages to business performance. Interesting as it sounds, it’s a challenging approach right ?  Well, it certainly will be - because making a business case is not just an additional responsibility, it is a change of mindset which the HR professional must be cognizant of in current times.
 

Does this need to make a business case mean that each initiative has to have a defined ROI or a clear monetary impact? Not really and not in entirety. What it does mean is that the HR person will need to think beyond – he or she will need to assess what happens after the initiative in a more structured manner and the resultant effect of the initiative on the business. What it also means is that HR should be able to speak the business’s language and explain this effect to the leaders. Finally what it also means is – an absolute end to working on silos! It means collaboration and buy-in, thinking through and coming together.

So in brief how is it that HR makes a business case for its initiatives? To keep it simple – here are some quick, generic steps that will apply across most initiatives - this is indicative, not exhaustive, so you could add more aspects that you find relevant: 

• Understand the organization’s vision and business objectives, its implications on people and particularly to the concerned initiative/intervention.

• Do a viability/feasibility study or a cost-benefit analysis – whatever you may choose to call the same, but basically a listing of the pros and cons ( should cover tangible and intangible impacts).

• Budgetary and resource support needed and for what duration.

• Market study of such initiatives ( if similar ones are run by competitor and your exit analysis shows that there has been attrition due to this being absent, as one of the study elements).

• Challenges/Roadblocks that you perceive and senior management’s involvement in the same.

• Project/Work plan with timelines and if this initiative has linkages to other future initiatives  

If you are able to work along the above steps, your business case will be as comprehensive as it can be. The rest depends on how clearly this case is communicated and shared with the senior management!

 
 

About the author 

Simran Oberoi is currently working as a Knowledge Advisor in SHRM India.  She has over a decade of experience primarily in HR advisory services in the areas of Rewards (Benchmarking, Strategy, Job Mapping, Measurement), covering APAC, South Asia and the US), Long Term Incentives engagements, Organization Restructuring, Capacity Building, Competency Frameworks and Talent Development. In consulting roles, she has significant experience in key global client accounts, project and people management.  She has an accreditation in Hay methodology and Job Mapping and as an APAC leader she has driven the Reward Information Global Sector Development strategy for 14 countries. In her current role she works in Knowledge Development which involves evaluation of key future areas, content creation as well as review for HR disciplines such as Executive Coaching & Leadership Development and Diversity, alongside Talent Development/Management and Rewards. It also involves research in key areas, the most recent ones being CXO/Leadership Development and Competencies.  

She has published several articles on different HR areas, with leading HR journals such as People Matters, Human Capital, Business Manager – HR magazine and industry magazines such as Oil Asia. She regularly contributes the SHRM perspective across print and electronic newspapers. She can be reached on Simran.Oberoi@shrm.org