Why Are HR Salaries Often Lower Than Other Departments? Seeking Insights and Answers

Understanding HR Salary Discrepancies

I am working as an HR/Operations Manager with an IT firm, and I always have one question in my mind that I wanted to share with all of you. If anyone can explain the reason, that would be great for me. The question is: As we are always an important part of the organization that makes salaries, creates policies, rules, and regulations, follows them, and ensures others follow them, why is our own salary structure lower than others? Why do we receive less than others?

I finally want to know why HR salaries are always lower than those in other departments. Are we not contributing anything to the organizational structure? Are we not working towards the organization's priorities? Technical people work with software and technologies, salespeople work with products, but a person in HR always has to work with people's minds. Then, why are our contributions to the organization not considered?

I have many more questions, but I first want to understand the reasons behind these things. There are many seniors here, and I hope to receive some positive replies.

Thanks

The Perception of HR as a Cost Center

It has something to do with the traditional perception that HR is considered a cost center rather than a profit center since it is not directly involved in generating revenues for the organization, unlike production, marketing, or sales departments. However, HR is indisputably a key contributor to organizational growth as the wealth of the organization is built by people, and people are developed by HR through its various initiatives.

HR professionals need to demonstrate to top management how their initiatives can directly contribute to the business and how they serve as strategic partners in the organization. Nowadays, organizations have begun to recognize the strategic role that HR can play in their business growth, especially considering talent shortages and the evolving business paradigms. Therefore, one can hope that in the not-so-distant future, HR professionals will command salaries on par with marketing and production professionals.

Best regards,
B. Saikumar
HR & Labour Law Advisor
Navi Mumbai