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HR is still struggling to measure the contribution made by staff to the bottom-line performance of organisations, exclusive research reveals.
A groundbreaking survey of 420 HR professionals by Personnel Today and Deloitte & Touche reveals that while 76 per cent of firms attempt to measure human capital only a few believe the methods they use are effective.
The most popular approaches are HR benchmarking, HR metrics and the balanced scorecard model, but more than four out of 10 users of these methods do not believe they are effective.
Brett Walsh, head of human capital at Deloitte & Touche, believes the study shows HR needs to do more to develop an effective approach to measuring the value of employees. Metrics need to be clearer, simpler to understand and based on data that is easy to collect and analyse.
"Measuring human capital is the holy grail for HR. HR needs to dispel the myth that it's the organisation's policeman. It has the potential to leverage significant bottom-line improvements in performance," he said.
More than 40 per cent of the 210 respondents that use HR benchmarking and HR metrics - which compare HR policies and practices across organisations and sectors - do not believe they are effective. Only 5 per cent rate them as highly effective.
The picture is similar for the second most popular model, 'balanced scorecard methodologies', adopted by a third of respondents. In all 43 per cent view this approach as less than effective.
Only 39 per cent of those surveyed could identify ways management behaviour had changed as a result of attempts to measure the impact of HR.
Walsh believes that in the current economic climate HR is under more pressure to prove its value to the bottom line and will have to invest more in measuring its performance.
For a free copy of Personnel Today's and Deloitte & Touche’s groundbreaking Measuring Human Capital Value report visit http://www.deloitte.co.uk/humancapital
By Ben Willmott
