Is Human resource function a cost center?
This is a discussion that you hear during the appraisal month or when some one from HR questions the production or business unit. I would like to put forth my thought and argument other wise .
The concept of Cost centers and Profit centers in erstwhile manufacturing companies had some relevance in practice basically because of the fact that they had more personal functions as their primary responsibility. They are the gate keepers for the Human Resources department to be kept in check . In New age service and technology companies they become the key function for growth.
If you consider the finance department as a cost center and you don’t provide appropriate resources to them, it will lead to loss of business and shut down of operations. In new age companies, the CFO function is core to any business. In the same line of thought, for me the Human Resource function plays a vital role in an organisation. For the organisation to be relevant and the business to exist, HR plays a crucial role . In my previous Blog , I argued that the role of the HR function is responsible for its resource to function well all the time and in order to maximize its output.
Let us compare the different functions in the human body. HR is like part of the brain function. It does not make sense for the body to exist without the brain fully functional. For new age businesses and organizations to grow, each function has its unique role. It is not right for the management to say that HR is a cost center. Instead you can say that the HR function should know the customers. The primary purpose should be communicated to each and every function of the business. Many companies move personnel who have managed business to the Human resource function because of its importance.
These are my thoughts. I would like to know your views if they are different.