Companies skilled at core HR practices experience superior economic performance, says new study
The Boston Consulting Group (BCG) and the World Federation of People Management Associations (WFPMA) released a new report called, "From Capability to Profitability: Realizing the Value of People Management." According to their research, companies that’s are highly skilled in their HR practices experience 3.5 times the revenue.
The research was based on 4,200 HR and non-HR managers and in more than 100 countries. The report compares companies in 22 key people management areas. These areas included; 1) recruiting, 2) on boarding of new hires and employee retention, 3) talent management, 4)employer branding, 5) performance management and rewards, and 6) leadership development.
“Among the key differences the study found between highly capable and less capable companies”:
- In leadership development, high-performing companies rely more on leadership models that clarify leaders' expected contributions and behavior. They also make people development a central element of leaders' job requirements, using incentives such as compensation and career advancement.
- In talent management, high-performing companies know that the talent pipeline must extend beyond the successors to top management. Consequently, they offer more development programs for a broader range of talent. They also try to attract more international talent. These companies are proactive with talent reviews and create ample career-advancement opportunities--including horizontal as well as vertical ones. They also do more to nurture employees' individual growth and keep them fulfilled professionally.
- In performance management, high-performing companies treat and track performance with transparency. They recognize the value of fair and transparent measurement and rewards systems in promoting a culture of meritocracy. They more often align and motivate their people with clear norms, expectations, and global standards. They reward behavior, not just results, to a greater degree than low-performing companies.
What does this mean for small business? The report shows that having a strong HR department means a stronger team which leads to better results. What do you think about this? Do you believe that having a strong HR in improve your company results?
Source - HR Daily