Generally, when the word `costing' is used, it is referred to many aspects of business other than HR. In fact, some people may even express surprise when a relationship is sought to be worked out between costing and HR. Even some HR professionals tend to think that costing is purely a financial exercise to control the expenses on raw materials, work-in-process machine utilizations etc., and that HR does not have any role to play. It is also seen that many fresh job entrants in HR do not have any inclination toward aspects of costing. The prime reason for such a mindset seems to be emanating from the traditional role of HR professionals and departments that did not involve any strategic decision-making or business issues affecting HR. In this backdrop, the article aims to throw light on certain costing aspects of HR, both as a service provider department and also as a group which represents people in the business roles generating revenue and profit.

The business environment of today requires flexibility and agility among employees to adapt to the changes occurring in the technology domain, customer and marketexpectations and process realignment, to meet the strategic objectives of the business. Hence the organizations now need to look at HR with a different perspective.

A 1998 survey by the Center for Effective Organization at the University of Southern California's Marshall School of Business, shows that 79% of HR Managers described themselves as `business partners', and 53% of line managers agreed that HR Managers are now performing the role of a business partner. The trend seems to be clear that today the HR function is partnering the business, and is also engaged in the strategic thinking of the top management. In this transitory phase, it is imminent that HR costing should be viewed as a subject of substantial importance and interest. Needless to say that HR cost is a subset of the overall organization's cost and hence the need to give it a proper consideration.

According to Towers Perrin Survey, 2003, talent and performance management systems are on `top of the mind' for senior leaders in many organizations. HR departments are therefore focusing attention and assisting business in performance delivery through appropriate HR policies and practices.

HRM Review Magazine, Costing HR Services in Business Organizations, HR Professionals, Decision-Making Process, Business Environment, HR Policies, Management Research, Services Sector, Accounting Standards, HR Planning, Top Management, Productivity Cost, Business Process Outsourcing, BPO.