A leading HR guru is to set up a consultancy promising a quantified
improvement to business performance.
Rhiannon Chapman, former HR director of the Stock Exchange and a former
chief executive of The Industrial Society, will offer employers at least a 16
per cent improvement in business performance at a charge of 0.5 per cent of the
pay bill.
It will the first time a HR consultant has dared make such a promise, and
builds on a growing body of evidence that good people management has a dramatic
effect on the bottom line.
Chapman said that in many companies people account for up to 80 per cent of
the business’s costs. "If it were anything else taking up that kind of
cost the board would watch it like hawks every day for what could be done to
improve on it."
The service will divide personnel activity into seven areas, such as
training, recruitment and diversity, and will assess where improvement would
make most difference to performance. Recommendations for change will be
concentrated in those areas.
She defended the cost, which would be £250,000 for an organisation with a
pay bill of £50m. The sum of consultancy programmes in each of the areas
covered by the new service could come to more, she said.
The link between management of people and business performance is
particularly strong where customer service is important. "Customers are
more loyal to organisations that have high staff retention; and repeat business
is six to eight times more profitable than new business," she said.
But she complained that personnel managers still fail to sell their ideas
because they do not understand general business issues. Many do not even know
the high proportion of costs taken up by employees.
Chapman, with business partner Hilary Condy, has sponsorship from a major
software provider of personnel systems. A formal launch is expected in the next
few weeks.
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