Mind your measures to prove value of HR

We read with interest your news story ‘Defining era for HR as staff move up agenda’ (Personnel Today, 9 August).

Measuring the effectiveness of HR’s contribution to the bottom line has long been a panacea in modern business practice.

The concept of investing in and consciously managing the performance of people has been one of the most important and positive business developments over recent decades. No company strategy or action can succeed without the buy-in and support of its people. This might seem obvious, but it is amazing how often businesses forget how fundamental people (and people results) are to their success.

Evidence supports the theory that if you look after your people, they will look after your customers, who in turn will generate a great return on investment for your shareholders.

This is all very well in principle, but the proof is most definitely in the pudding, and proving your HR pudding is adding value to the bottom line still remains elusive to many HR departments.

What to measure and how to measure it are still questions regularly asked by HR professionals. Recruitment, turnover and retention ‘costs’ may have been acceptable measures in the past, but HR is rapidly recognising that these will never show how the HR function contributes to profit and the bottom line.

What HR professionals need to do is create measures aligned directly to the core vision, mission and values of the organisation, so they can illustrate exactly how HR contributes to the bottom line and adds value to the business.

Caroline Ford
Business coach
Results International

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