What Is Your Worth? How HR Asks for a Raise

by Jessica Miller-Merrell, Blogging4Jobs

Scenario: Your team’s workload has increased and your team has implemented innovative systems. Your department is running like a well-oiled machine with increased productivity despite the occasional (ok – incessant) curveball. You’re putting in the long hours and delivering results. Leadership trusts you. 

And you want to be compensated and rewarded for what you are bringing to your company.

You aren’t the first person to feel this way and certainly won’t be the last, but let’s throw a new variable into an already complex equation: you represent Human Resources. 

Human Resources doesn’t bring in revenue. We are not income generating. We don’t close deals on software, bring in major contracts or even build the product. Human Resources weighs down the budget without bringing anything tangible in return… or does it? We are responsible for the compensation and evaluation of often the entire organization, recruiting the next wave of talent (that will bring in the big bucks) and are often champions for merit increases on behalf of other employees. 

Organizational leaders might not realize the complexities or value of the company’s own human resources team. Chances are, as technology has rapidly changed, so have the roles and responsibilities of those within the HR department. Compare the day-to-day tasks of HR just four years ago against today and there are terms and networks that employees are actively engaged in on a daily basis that were non-existent then. HR reaches every department, every employee and every potential employee. From IT to OD, it can boost the effectiveness of other departments and indirectly impact the bottom line. 

So how exactly does HR ask for a raise

The key is knowing your numbers and providing analytics. Strong HR reporting and a scorecard are critical to demonstrate HR’s impact throughout the entire organization. Even when your company has put a hold on raises, you should still ask. A solid report showcasing your impact provides leaders a new view at their ROI within your department positioning you for increased compensation directly tied to your efforts and results. Justify an increase for your HR team and build your reports from these concepts to build your case and drive the conversation:

  • Economic Value-Added: financial numbers expected of the executive.
  • Customer Value-Added:  (CVA) defined as meeting customer-service goals.
  • People Value-Added:  defined as meeting employee expectations. 

These concepts are the foundation for a balanced scorecard which should ultimately focus on multiple stakeholders. The most critical component is to prioritize what your HR department should report, and because each company’s needs vary, your HR team’s mission and analytics should be customized to reflect organizational goals and culture. The question an HR leader must ask either directly or indirectly of their senior leaders is, “What keeps your executive team up at night?” and use the responses to drive the conversation and help them answer why your team deserves a raise before you even ask it.

Next, consider your current programs, which they affect, and how they impact your organization. Using this balanced scorecard approach, you may consider including some of the following analytics when making the case for HR.  

  • Monthly Turnover Rate = (number of separations during month / average number of employees during month) x 100).
  • Revenue per Employee = total revenue / total number of employees.
  • Cost per Hire = sum of external costs + sum of internal costs / total number of hires over a certain time period. 
  • Yield Ratio = percentage of applicants for a recruitment source that make it to a determined stage of the application process.
  • Human Capital Cost = Pay + Benefits + Contingent Labor Cost / Full Time Equivalents.
  • Human Capital ROI = (Gross Revenue) (Non-employee Related Expenses) / Total Compensation for Full Time Equivalents and Contingent Workforce.

Don’t make the case for the individual person, but give the numbers and consider how each formula impacts and correlates with another. If you can, demonstrate a direct relation between the HR team’s new employee benefits package and increased employee satisfaction and employee retention. Is this trend verifiable over a specific and defined period of time — what’s the value of this for your company? Find the answer and you’ve made a case for “The Compensation Quandary and How HR Asks for a Raise.”

What is HR Worth:

“Your What If” search conducted using PayScale.com in three different US cities to find the median income for Human Resources (HR) Director with 8 years of experience, managing 3 employees, holding a BA in business and HR Management and working in the Software Development Industry 

Location: New York, New York
Median Income:  $108,000

Location: San Francisco, California
Median Income:  $102,000

Location:  St. Louis, Missouri
Median Income:  $83,000

Location:  Austin, Texas
Median Income:  $80,000

Jessica Miller-Merrell, SPHR is a workplace and technology strategist specializing in social media. She’s an author who writes at Blogging4Jobs. You can follow her on Twitter @blogging4jobs


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1 Comment

  1. 1 vera 20 Apr

    We have our hours cut in the pass three years from

    80 now to 64 what can be done?



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