In the dominant managerial mindset, the HR function remains largely associated with a fixed expense item: salaries, training, recruitment, administrative management. This accounting perspective obscures a fundamental economic reality: a quality human resources director constitutes one of the most profitable investments an organization can make.
The Blind Spot of Organizational Performance
Traditional financial performance measurement models poorly capture—or fail to capture at all—the deferred and hidden costs of human underperformance. Yet, as demonstrated by Henri Savall's pioneering work on hidden costs and Edgar Schein's research on organizational culture, these silent phenomena often represent several points of operating margin.
Three value-destruction mechanisms regularly fly under the radar:
Presenteeism, this physical presence without cognitive or emotional engagement, generates an estimated productivity loss of 30% of effective working time for affected employees. In a 300-person company where 20% of staff experience this phenomenon, the annual impact approaches €900,000 in uncreated value.
Uncontrolled turnover entails replacement costs equivalent to 1.5 times the annual salary of the position: recruitment, onboarding, skill development, loss of institutional knowledge. For an organization losing 15% of its workforce annually, the cost easily reaches €450,000.
Structural absenteeism, distinct from legitimate absences, signals deeper organizational distress. Reducing the absence rate by 3 points represents a gain of €300,000 for a payroll of €15 million.
Added to these phenomena are the exponential costs of burnouts (€50,000 per case on average), unregulated interpersonal conflicts, and avoidable legal disputes. In total, preventing these dysfunctions can generate between €2 and €2.5 million in annual savings for a mid-sized organization.
The Transformational Dimension: Creating New Value
But the contribution of a strategic HR function is not limited to cost avoidance. It also lies in its capacity to create the conditions for superior collective performance.
A mature HR department accelerates cultural and operational transformations. It reduces adaptation delays to change by 30%, thereby limiting transitional productivity losses. It develops leadership capabilities at all levels, multiplying managerial leverage effects. It builds organizational cohesion that enables more effective absorption of external shocks.
These qualitative gains translate into a measurable 5 to 10% improvement in collective performance. For a company generating €30 million in revenue with 300 employees, this represents between €750,000 and €1.5 million in additional annual value.
Legal Prevention: Securing the Organization
Finally, a proactive HR function ensures essential legal security: anticipation of psychosocial risks, regulatory compliance, dispute prevention. Each avoided employment tribunal case saves between €15,000 and €50,000 in direct and indirect costs. Beyond financial aspects, it preserves institutional reputation and maintains a social climate conducive to performance.
This preventive dimension generates approximately €450,000 in annual value for our reference organization.
Toward a New Representation of the HR Function
In total, a quality human resources director can generate between €3.5 and €5 million in annual value in a 300-person company, or €12,000 to €17,000 per employee. These figures, far from being fanciful, rest on solid empirical data and proven evaluation methods.
Yet this contribution remains largely invisible. Why?
Because HR gains are predominantly preventive and diffuse: they prevent problems that will never occur, improve collective dynamics that are difficult to isolate, create favorable conditions whose effects unfold over time. Traditional accounting systems, structured around direct and immediate flows, do not capture them.
Three Action Levers for HR Directors
This perception asymmetry calls for a three-pronged response:
Measure and objectify. It is possible—and necessary—to quantify the impact of HR actions. Social barometers, human performance indicators, evaluation of avoided costs: these tools exist and enable demonstration of the return on investment of the function. Just as workload can be scientifically assessed, the value created by HR policies can be demonstrated.
Change mental posture. Human resources directors must themselves internalize that they constitute a highly profitable investment, not a fixed cost. This conviction is not a matter of ego: it conditions the ability to negotiate necessary resources, defend structural projects, and fully occupy one's strategic position.
Preserve time for strategic thinking. Operational urgency often consumes most of the HR agenda. Yet 20% of time devoted to thinking about strategy, identifying levers, and building cascade effects generates 80% of value. The goal is not to work more, but to maximize the impact of each action.
A Question of Organizational Maturity
Ultimately, recognition of the strategic value of HR constitutes a marker of organizational maturity. Companies that consider this function as a value-creation partner—rather than an administrative constraint—gain a sustainable competitive advantage.
For if a good HR director generates several million euros in annual gains, the reverse is equally true: an undersized, poorly positioned, or undervalued HR function destroys value on a large scale. Between these two scenarios, the gap can represent 10 to 15% of operating margin.
The choice, therefore, is not merely accounting. It is profoundly strategic.
Matthieu Poirot
PhD in Management Sciences, Organizational Psychologist
Expert in Organizational Transformation and Quality of Work Life
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