Your company’s bottom line looks bleak. Or worse yet, seesaws between black and red. But is there any hope for righting the ship and getting back on track?

Departments with obvious connections to profitability, such as sales and finance, often land in the spotlight for review right away. But the underlying performance of all these departments hinges on the people within them. That means effective human resources practices are a critical component to improving your bottom line.

Human Resources and Your Bottom Line

As human resource functions are rarely perceived as having a major impact on a company’s bottom line, it’s important to prove where the value lies.

When you break it down, the simplicity of HR’s impact becomes clear: People make up a business, and the talent and engagement of those people dictate productivity (and subsequently profitability). HR handles attracting and retaining the right talent to ensure the company is performing at its peak.

And yes, you guessed it, that includes improving the bottom line.

So, while it’s important to explore direct revenue-generating avenues, it’s just as important to take the pulse of your own people and identify any workforce gaps.

Let’s dig deeper.

Business Knowledge and Talent Management

To target, attract, and hire the best talent for your company (the goal of any HR department), you need to understand your business.

Ask yourself:

  • How does your company make a profit?
  • What goods or services does it provide?
  • How does your company operate?

The answers to these questions drive the recruitment and talent management processes. Candidates who can perform the job well, who want to invest themselves in the organization, and who strive to ensure customer satisfaction will be more productive, positively impacting the bottom line.

In conjunction with recruiting candidates that best fit your organization and its culture, leadership talent management is critical to the bottom line.

Speaking of office culture, take a look at this post to find out if your workplace culture is poisoning you.

The number one reason employees quit is because of their manager. And turnover is expensive! There are costs associated with hiring, onboarding and training, learning and development, and lost time/productivity due to an unfilled role. The average of these costs can land anywhere between 16% and 213% of the person’s salary, depending on their role.

So, take a look at each departments’ needs. Then, recruit and develop a person that will lead through action and behaviours that inspire staff to perform at their best.

Strong leadership can make or break your business.

Employee Engagement

Research done by the Hay Group shows that there is a causal link between employee engagement and business performance. Happy employees are more passionate and focused, which means higher productivity levels.

Ultimately, this means happy employees directly impact your bottom line.

In fact, Hay Group’s research suggests firms scoring high on employee engagement had, on average, 4.5 times the revenue as those with the lowest scores.

So, take a look at your workforce. Are your employees engaged? Are they going above and beyond at work, working creatively, and have high energy for their work? Or do they spend excessive time at the water cooler? Take extended lunches? Or slip out early more often than not?

Ways to improve employee engagement

To improve engagement levels, look beyond money. After all, employees want to be happy at the place they spend the majority of their waking hours.

Focus on some of these areas for improvement:

1. Building trust

Employees must feel a level of trust to be engaged in their work. If they’re constantly being undercut by management, the message they receive is their decision making and work are untrustworthy. Ultimately, this dilutes engagement levels.

2. Flexibility

Work-life balance is becoming not just a buzzword. It’s an expectation in modern society.

Giving employees the flexibility to work based on preference (from home, at night, during nap time, etc.) while ensuring the work gets done and 40 hours are put in, shows the work itself is more important than how and when it gets done. The needs of the employee are met, the work gets done, engagement levels rise, productivity improves, and the bottom-line soars. Win-win.

3. Acknowledge Good Work

Engaged employees will go above and beyond to ensure positive results. If their dedication goes unnoticed, a highly engaged employee will lose the motivation to continue working so hard.

Publicly acknowledge accomplishments as joy can be found in praise. Frequent positive feedback and rewards will have a longer reach than a single, infrequent prize. This also helps promote a positive work environment, where everyone feels valued. A positive work environment through teamwork and communication will increase engagement.

A smile and “thank you” have no impact on the bottom line. But the social currency? Now that’s invaluable.

4. Set the Example

If you want excellence from your staff, you must show excellent behaviours. Make employees feel important, valued, and heard through open communication, transparency, and honesty. That connection makes employees feel part of the big picture like they’re making a difference through their work.

5. Offer Extended Benefits

Offering benefits beyond the basics shows employees you care about the health and happiness of them and their families.

A few examples? Greater life insurance can protect their income. Health and wellness subsidies promote healthy minds and bodies. Dental and vision coverage tap into the whole body, not just what is looked at by a general practitioner.

Not sure if a benefits plan is right for your small company? Click here to find out.

6. Provide Growth Opportunities

If you want employees to continually be engaged, they can’t be assigned the same tasks day after day. Talented employees want to continuously learn. Tasks that need productivity, ingenuity, and that allow them to grow professionally will make them feel worthwhile and appreciated. This can motivate them to work at their greatest capacity and capabilities.


Engagement also boosts retention levels, which improves business performance as long as the right people are in the right roles. Retention can also be seen as a component of cost savings given the high price tag associated with turnover rates. Knowing HR is responsible for ensuring employee engagement, it’s clear HR can have an astounding impact on a company’s bottom line.

Competitive Learning

The same study completed by the Hay Group noted that engagement is not the only factor to happy employees.

Employees may be engaged at work. But if they don’t have the right tools to complete a task, they will quickly get frustrated. Employers must enable their employees as well as engage them.

HR helps make sure employees are well-equipped with the appropriate skills to do the tasks assigned to them through competitive learning. Keep your staffs’ skills and learning as up-to-date as possible through applicable courses, training, and business travel to further their knowledge of the company. This translates into profitability.

HR and Business Strategy Alignment

There is no one specific HR activity that will improve the bottom line for all companies, no “one-size-fits-all” solution. Rather, the success of any HR strategy will be based first on the understanding of each department’s business strategy. This link will provide proper guidance when building a plan to achieve any organizational goal.

Remember, profitability yields from productivity. And that’s all about having the right people, in the right roles, who are engaged, enabled, and developed in alignment with organizational goals. As HR is responsible for all of those elements (recruitment, employee engagement and enablement, and learning and development), it’s safe to say Human Resources has a clear impact on the health of the bottom line.

So, when you focus on your people AND your clients, success is at your fingertips.

Click here to learn more about our Human Resources Consulting services to help companies build a great organizational culture. Or get in touch with us today to see how we can help.

Enjoyed this article? Here are three more to help you:

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This article was originally published on May 1, 2019, and has been updated.