As the demand to deliver high-value services increases in tandem with the need to drive productivity, cost optimization remains high on the list of priorities for 92% of HR functions. However, HR leaders often respond to ad hoc cost reduction requests, leading to unintended consequences for the business.
HR’s Role in Cost Reduction and Optimization
Driving enterprise-wide cost optimization
HR often has to make ad hoc cost-cutting requests
Cost optimization goes beyond cost cutting
To maximize cost savings, HR leaders should pursue cost optimization through both function-specific and enterprise wide programs. Cost optimization is a business-focused, continuous discipline intended to maximize business value while reducing costs.
Insights you can use
From helping HR functions drive baseline efficiencies to creating a sustainable cost optimization roadmap, Gartner makes sure that cost optimization is an ongoing, strategic discipline rather than an emergency-driven project or one-time undertaking.
How to Prioritize HR Cost Optimization Initiatives
Cost optimization efforts fail to yield their full potential when they are not systematically evaluated. Good cost reduction decisions require a clear and rigorous business-driven understanding of the relative investment, risk, time, impact and benefits of potential cost optimization initiatives.
What Employees Really Think About Cost Management
With nearly 80% of employees believing that their organization is likely to reduce costs in the next 12 months, understanding their perceptions of past cost-cutting programs helps HR plan future cost-saving initiatives and receive better workforce buy-in.
Don't Forget About HR Structure
HR leaders have increasingly applied more differentiated and specialized HR structures, but this has often resulted in conflict and duplication. CHROs must understand the tensions in different models, and tailor their structure based on their context, to deliver cost-optimized HR.
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