Cha-Ching: How to Transform HR into a Profit Center

Can the HR function have an impact on an organization’s bottom line? According to Casey Webster, the founder of consulting firms 10X Talent and My HR Extension, the answer is a resounding yes.

Her Monday, April 20, Total Rewards ’26 session, “HR Is a Profit Lever: How Strategic People Leaders Think Like CEOs and CFOs,” in San Antonio, Texas, aimed to show the audience:

• How to apply CEO and CFO decision-making frameworks to HR.
• Understand the evolution of HR from service provider to strategic operator.
• Build executive-ready business cases for talent, compensation and people initiatives.

Webster opened her presentation discussing how the HR function is often brought into an organization only when “things start to break down,” noting how most executives have little to no experience in the people and culture function and only go to HR to “fix things.”

Instead of being viewed as a role that only deals with paperwork and compliance, HR should be teaching the organization how to come to them, Webster said.

For example, they should be asking questions such as:

• “How do we make money?”
• “How do we go to market?”
• “What sales are we trying to hit?”

It’s an opportunity for HR professionals to train and develop CEOs to show them HR is there to grow the business, Webster said.

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Perception Versus Performance

According to Webster, there are several reasons why HR isn’t viewed as a cost center. The function is:

• Tied to activity, not to the outcome of the business.
• Defined by how the business sees them.

So, is it a perception or performance problem? Perhaps HR should show up to work differently, Webster said.

“When we have a tactical HR presence and an underdeveloped executive team because we haven’t developed them, the effect on the business is turnover, weak leadership and underperforming teams,” she explained.

Therefore, the perception of HR turns into a performance problem. To solve that, start looking at ways to discuss business outcomes. For HR, the first place to go is typically turnover, said Webster.

“It’s happening every day and most companies don’t know how much it’s costing them,” she said.

Webster also noted one thing HR leaders should avoid is just tracking the number of turnovers instead of calculating the cost.

“What does it mean when I say, ‘I have 10 open roles?’ That doesn’t have a number I can point to say, ‘Because our time to fill is 90 days, it’s costing our company this much money,” she said.

Even though they’re seen as normal benchmarks, she said when you give it a number (e.g., turnover costs $850,000 per year or $2 million a year), that’s when it becomes a business problem that needs to be fixed.

How HR Can Become a Profit Lever

Start by measuring business outcomes, Webster said, not only HR activity. That means connecting people issues with performance to dollars and taking ownership of leadership capability.

By getting the business data and connecting it to people, HR professionals can begin fixing this business problem.

For strategic HR leaders, Webster said their next steps include:

• Translating the problem into monetary terms.
• Identifying where it’s happening.
• Asking if leadership is driving that problem.

By utilizing items such as employee feedback and exit interviews, they can invest in fixing the problem, Webster said. For example, if a bad manager is the source of high turnover, the HR professional can propose spending $25,000 in leadership coaching and development for that leader instead of risking losing more people —and that’s where HR becomes a profit lever by saving money and “making the bleeding stop.”

“Now the CEO isn’t making a people or HR decision — they’re making a business decision,” Webster said.

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Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Finance and Budgeting
• Organizational Performance
• People Analytics