Business leaders blind to benefits of human capital

Most directors and chief executives are not aware of evidence linking people
management strategies with improved bottom line, according to a CIPD study.

The report also finds the majority of board-level managers do not know good
HR practice has a bigger impact on an organisation’s performance than
investment in research and development.

Voices from the Boardroom is based on interviews with 48 board-level
managers, including CEOs and HR directors from 16 organisations in the public
and private sectors.

Most managers said it is clear good people management boosts organisational
performance, but there is a lack of understanding about what works in practice.

Respondents are confident about the impact of careful selection and
performance management, but much more unsure about the benefits of training and
sharing information.

CIPD director general, Geoff Armstrong, said the study shows more needs to
be done to raise awareness of the importance of HR to an organisation’s

"Senior managers are unaware of the compelling evidence that links
people management with the bottom line," he said.

"This lack of awareness means boards are not getting the maximum
benefit from linking business and people strategies. People management
professionals are ideally placed to guide board colleagues and line managers in
this critical area of business.

"The CIPD is committed to both building the evidence and defining what
works in creating world-class enterprise."

Most chief executives questioned are positive about the HR function and a
few very positive. But many are unclear about what to do with the function.

Only 13 of the 48 board members questioned are aware of research linking
people management to the bottom line.

By Ben Willmott

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