Author: Jonathan Aitken
When executives hear the term “Human Resources”, many instinctively picture soft, culture-driven topics, employee wellness, team-building exercises, or diversity workshops. While these have their place, today we’re focusing on the hard-edged financial perspective of HR, and how it can be used to drive revenue, reduce risk, and improve cost efficiency. For CFOs and CEOs, this is not about HR as a “nice-to-have” function. It’s about HR as a strategic tool to protect and grow the bottom line.
The HR maturity curve: Four stages of financial impact
The starting point for using HR as a financial tool depends heavily on the maturity of the business. Below we unpack four stages along the HR maturity curve, each representing a step-change in financial sophistication and value extraction from the workforce.
STAGE 1: PEOPLE ARE A RESOURCE ONLY
HR focus: Risk management and basic compliance
Financial priority: Avoid unnecessary costs (e.g. unfair dismissals, absenteeism, and payroll fraud)
At this lowest maturity level, people are seen purely as a cost centre, hired to do a job, paid for their time, and not much more. In this environment, HR’s role is administrative, and little to no investment is made in development or culture.
Key considerations to manage risk and save money at this stage are:
- Employment contracts and documentation: Signed, up-to-date contracts reduce risk in legal disputes
- Policies and procedures: Clear disciplinary, leave, and performance procedures help avoid CCMA cases and payout liabilities
- Time and attendance systems: Digitised systems with line manager sign-off reduces fraud, overtime abuse, and absenteeism issues
- Structured onboarding and offboarding: Ensures immediate productivity and limits operational and reputational risk
- Strong payroll controls: While not “sexy” the payroll process is a critical area to manage costs and compliance at this stage
While there is no transformation of the workforce at this stage, cost containment is crucial, and good HR hygiene can have a direct impact on the P&L.
STAGE 2: UNDERSTANDING THE BUSINESS
HR focus: Workforce analytics and operational efficiency
Financial priority: Make better, faster business decisions using data
At this point, management recognises that knowledge about workforce behaviour is critical, just as in logistics, finance, or production.
Key financial actions include:
- Time and task data collection using T&A and other tools: Understand where employee time is going, especially in service businesses or admin-heavy operations
- Cost-of-labour mapping: Which tasks are eating up high-cost employee time unnecessarily?
- Output-per-head benchmarking: Compare across departments or teams to spot inefficiencies or top performers
- Special analysis: Look at leave patterns, output per shift, and output metrics by business area
The question becomes: “So what? What do we do with this data and what do we do differently at a macro and individual employee level?”
Now that we know how time and effort are distributed, what do we change? This is the moment HR transforms from cost control to operational optimisation, using real data to drive strategic decisions.
STAGE 3: USING NEW TECHNOLOGY
HR focus: Automation and productivity gains
Financial priority: Reduce time spent on low-value activities
Once businesses have visibility over workforce time and tasks, the next step is investing in tools to increase output and reduce manual, administrative non-value adding effort.
Some examples include:
- Robotic process automation (RPA): Automate repetitive tasks
- AI assistants: Streamline reporting, documentation, and other admin tasks
- Workplace redesign: Improve workplace layouts to reduce time wastage
- Low-code tools: Empower departments to automate their own workflows at minimal cost
What’s important here is that the ROI is clear and fast. With better workforce data from Stage 2, executives can identify exactly where inefficiencies lie, and technology becomes a surgical solution, not a vague digital transformation project.
STAGE 4: LONG-TERM PEOPLE PLANNING
HR focus: Talent design and workforce architecture
Financial priority: Future-proof the business by investing in the right people
At this level, HR becomes a true partner in strategic planning. Businesses begin to make deliberate, data-backed choices about the composition and capability of their teams:
- Psychometric testing and personality profiling: Identify behavioural traits that correlate with long-term performance in your environment
- Team design: Match team personalities for better collaboration and leadership structures
- Talent pipelines: Develop graduate programmes or early career pathways to build a future-ready workforce at a lower cost
- Hire for fit, train for skill: Reduce hiring failures by prioritising attitude and compatibility over credentials
Rather than reacting to turnover or skills gaps, companies here design their future workforce with intent. HR becomes a driver of growth and resilience, not a reactive support service.
The bottom line: Measuring ROI from HR
Across every stage, the question remains the same: “How does this save us money or make us more efficient?”
CFOs and CEOs should work with HR to define clear productivity and financial KPIs:
- Cost per employee vs. revenue per employee
- Absenteeism and turnover rates
- Output per hour worked
- Time-to-fill vs. cost-of-hire
- Automation ROI vs. manual process cost
HR metrics should feed the same dashboards as sales and operations.
HR as a strategic financial lever
HR isn’t just about people – it’s about performance, protection, and profit. For CFOs and CEOs willing to look past the “fluffy” side, HR offers a powerful lever for bottom-line improvement. The journey from compliance to optimisation to strategy takes time, but the financial impact is real and measurable.
HR is no longer the domain of the “soft stuff.” It’s a hard business function with hard numbers, if you know where to look. And if you’re not quite sure, we’re here to help – contact us for more information.