Firms fail to use HR benchmarking
This article first appeared in the Sunday Business Post, 1, May 2011 (by James Enright)
Reproduced by permission
More than half of Irish companies do not use human resources (HR) benchmarking to assess the value their employees bring to the company, according to a new survey.
The study, commissioned by PricewaterhouseCoopers (PwC) on behalf of the Chartered Institute of Personnel Development (CIPD), sought to identify the changing role of the HR function in Irish organisations.
Almost three in five top HR executives in areas including banking, pharmaceuticals and retail currently do not use benchmarking metrics of any kind to analyse the value their people bring to the organisation.
However, a fifth of all respondents said that they were planning to implement such benchmarking in the future. ‘‘The relationship between HR and the business itself is in transition," said Ciara Fallon, a senior manager at PwC.
‘‘HR professionals need to reorganise themselves to make sure they drive business performance and get the most from a workforce."
The survey also showed the changing face of Irish business, with four out of five respondents indicating that they were currently working to some form of business transformation agenda.In these organisations, the role of HR is also perceived to be changing. Almost half of respondents felt that HR had moved towards leading and driving the business agenda.
‘‘There has to be a renewed focus on human capital management and people metrics," Fallon said.
‘‘This will allow companies to measure individual contributions to company growth.
‘‘If an organisation suffers high staff turnover or a high incidence of absenteeism, this can be identified through benchmarking against other companies in the same industry. ‘‘In turn, companies can make savings by addressing the problem."
Nearly half of the sample said that their businesses’ engagement in the ‘people agenda’ was the key challenge facing HR. Another fifth said their organisation lacked resources in HR.
‘‘The biggest obstacle to effective HR management is the lack of appetite in companies to use their human resource professionals to their full potential," said Fallon.
According to the findings, the most important HR priority over the next 12 months is the reorganisation of business processes to better meet customer needs and reduce costs. This was followed by ensuring the availability of appropriate talent and skills in the company.
The survey findings for Ireland are consistent with a global PwC survey which found that an overwhelming majority of global chief executives were planning to make ‘some’ or ‘major’ changes to their strategies for managing talent.
