When the HR department is compared with other departments, HR is often measured by employee well-being and satisfaction, while other departments, such as Sales, Marketing, and Customer Success, are rigorously measured by how they support the business commercially. The business value HR creates or fails to create is often opaque.
This is precisely one of HR’s biggest problems. If you cannot document your business value, you will not be taken seriously when the strategy is being developed, and crucial decisions are being made.
Companies that excel in recruiting the right people achieve greater revenue growth and higher profit margins.
A study conducted by Boston Consulting Group (BCG) and the World Federation of People Management Associations (WFPM) demonstrates why it pays off to allocate resources to improve recruitment efforts, thereby achieving greater revenue growth and higher profit margins.
The study categorizes companies into high performance and low performance. They are divided based on profit margin and revenue growth, with high performance companies in the top 10% and low performance companies in the bottom 10% of the surveyed companies. HR professionals from these companies responded to how their efforts align with 22 key HR topics.
It is noteworthy that high performance companies experience 3.5 times greater revenue growth. Additionally, they achieve 2 times higher profit margins compared to low performance companies. The reason for the significant disparities between companies lies in what each company focuses on.
The most successful companies place a greater emphasis on building strong leaders, attracting, developing, and retaining talent. Furthermore, they excel in continuously managing and evaluating employee performance.
Companies that invest in leadership development, talent management, and performance management experience significantly higher revenue growth and profit margins, according to the study.
Join us in a webinar on this subject and sign up below.
