HR functions need to create a credible way of measuring their impact on the bottom line if they are to mainstream strategic people management, according to Denise Kingsmill, former head of the Accounting for People Taskforce.
She said the taskforce had not chosen to create metrics to measure the impact of HR policies because it was impossible to use a ‘one size fits all’ approach.
Instead, she recommended that companies build their own methods of measurement that could show increased productivity and shareholder value and which could also be easily understood by City analysts.
Different business sectors could then start working on indicators that could be applied to their specific circumstances, she said.
“If HR is to be a business function that can hold its own against the likes of marketing and IT then we need to be able to demonstrate a link between productivity and people – we need metrics,” Kingsmill said.