Measuring HR: pain or gain?
Quest to measure HR investment — a growing trend
Top performing companies in South Africa are increasingly seeking to measure the impact of their investment in HR as part of an ongoing commitment to improving performance in challenging economic times.
This is according to the latest research from the Top Employers Institute, a global HR certification company, which released the results at a Certification Dinner at Gallagher Estate in Johannesburg, on October 1 2015.
Seventy-seven companies achieved Top Employers status in South Africa for 2016. The list includes multinational stalwarts and home-grown corporates. Headquartered in the Nether–lands, the Top Employers Institute annually certifies Top Employers around the world who uphold the highest standards in employee working conditions. This year it marks 25 years of excellence as a global certifier.
“Increasingly, organisations are shifting their perspective on HR. We see our certified Top Employers largely focused on building or creating the right conditions for their employees to excel in what they do. We have worked hard to globally set the benchmark for best HR practice in this regard,” says Top Employers Institute chief executive David Plink. “The programme is increasing in size year-on-year, which shows that organisations [increasingly] see the value of investing in staff and committing to good HR practices.”
Top Employers are able to use the Certification Seal on their official communications. Recent research conducted by MWM2 marketing agency shows that 60% of those polled indicated a more positive perception of an employer that had been awarded the Top Employers Certification Seal.
“Being recognised as a Top Employer is an integral part of our talent strategy and as such we take our association with the Top Employers Institute very seriously,” says Brent Cairns, talent strategist manager at Accenture. “We have a relentless talent mindset. Our business is based, first and foremost, on our people. The essence of what we do in HR is attract, develop and retain the most highly specialised talent for Accenture and our clients.”
Billy Elliott, country manager at the Top Employers Institute South Africa, says one of the trends identified from the HR Best Practices Survey is an increasing focus on measuring the impact of HR in order to establish correlations between effort and results within key areas, like learning and development, career and succession management, on-boarding and performance management.
“We find that Top Employers will try to measure the effectiveness of various areas within HR,” says Elliott. “The trend is to measure details, such as tracking the reasons for an employee leaving a company, diversity and high performer attrition on a regular basis, as more data provides clarity in terms of the impact HR is having on the organisational effectiveness.”
Insight from the survey revealed that Top Employers are primarily using key performance indicators (KPIs) as a measurement tool along with qualitative evaluations from HR, executives and employees to determine the effectiveness of different HR functions. A total of 93% of Top Employers, for example, used KPIs to measure the success of their talent strategy, while 75% used KPIs for career and succession management.
At a company like Unilever, these are not seen as mere HR measures, but measures of organisational success. “We constantly measure how effectively we implement our principles, tracking things like how many of our employees get promoted, how effectively we are building an inclusive culture and how many of our employees are going on international assignments,” says Unilever’s HR future leader James Hu. “This is reviewed at board level. In fact, we sometimes spend more time discussing and action planning how we can create a more inclusive environment than we do on the monthly business results.”
What differentiates Top Employers is that HR fulfils a strategic role within the organisation, comments Elliott. He adds that the Top Employers Institute is also observing an emerging correlation between top performing companies and the level of involvement in HR from executive management.
At Accenture, HR is involved at a strategic level in company decisionmaking. “Our HR director sits on Accenture South Africa’s Advisory Board and provides a strategic role in key appointments and the business strategy implementation,” says Cairns.
Results from the Top Employers Institute’s HR Best Practices Survey showed an increasing trend for exec- utive management to be more handson in evaluating various areas of HR, but that this is not the case across all areas.
The three areas where executive management was most involved were talent management (96%), career and succession management (85%) and performance management (81%). The areas where it was least involved were exit management (68%) and onboarding (51%).
Elliott says: “The research findings indicate that what sets Top Employers apart from other companies is not just their focus on creating optimal employee conditions from recruitment to exit, but their increasing commitment to measuring and quantifying these investments. I believe this is part of a commitment to continuous improvement in HR practices that ultimately results in a top performing organisation where people want to work.”