Reassess HR: How companies prevent a personnel blackout

The lack of skilled workers and managers is currently the biggest business risk for German companies, causing costs in the billions. According to current studies, companies incur costs of 86 billion euros per year due to a lack of personnel. Nevertheless, many companies have not yet leveraged an important strategic lever. This involves fundamentally reevaluating human resources departments. Often, those responsible are underpaid, and in many places, there is also a lack of appreciation and autonomy. The skills shortage requires a rethink. According to the Institute for Employment Research (IAB), in the third quarter of 2022 alone, 1.82 million positions remained unfilled. The job market in many industries is now so depleted that human resources departments have become more than ever a key factor for business success. If the HR department is well-positioned, it can attract the few skilled workers available in the market, who are essential for a company's growth. However, it has become more than that: increasingly, the survival of a company depends on the HR professionals. Only if the HR department manages to maintain the workforce and develop existing employees will companies be able to fulfill their orders. Underpaid HR professionals Paradoxically, the significant role the HR department plays in light of the current crisis is not reflected in many companies. This is already evident in the salary structure. In Germany, the majority of HR executives earn about 15 to 25 percent less than comparably qualified employees in sales. There is also a significant gap in entry-level salaries. For example, comparing the salary of HR clerks with that of IT employees, the former is sometimes more than 25 percent lower. Wasted potential An imbalance that contributes to motivation and performance in Human Resource Management often falling far below what is possible. However, it is not only the compensation that sets wrong incentives. Much more crucial is that in many companies, the HR department is not given the strategic importance it deserves: highly qualified HR professionals often spend their time on routine tasks, such as organizing seminars or posting job advertisements. Real changes are thus rarely driven within the company, and their strengths and talents remain unused – a prime example of wasted potential. Paradigm shift necessary To ensure their survival, companies must urgently adopt a new perspective and consistently elevate the HR department. A paradigm shift is necessary. The department must be given the recognition it de facto holds as a strategic problem solver. HR professionals not only have a good sense of the issues and concerns within the company but also the competence to address them. Instead of desperately searching for skilled workers, they are, for example, capable of developing the existing workforce strategically and eliminating demotivation among employees. This can significantly alleviate the skills shortage issue. Rethinking on both sides However, to unlock the potential in the HR sector, a rethink is required on both sides. The management is called upon to provide the HR department with more autonomy and, above all, more resources so that it can effectively carry out its tasks in the company. At the same time, HR professionals should actively demand their new role as problem solvers and contribute to enhancing their value by delivering visible results. This way, what many companies currently hope for can be achieved: securing a decisive strategic advantage in the highly competitive job market.