A report from the Boston Consulting Group and World Federation of People Management Associations entitled “From Capability to Profitability” demonstrates that those companies that have strong people management practices achieve up to 3.5 times the revenue growth and achieve twice the profit compared to those that do not. The key people management interventions that make the difference are identified as:
– On-boarding of new hires and retention
– Talent management
– Employer branding
– Performance management
These findings mirror an analysis undertaken a few years ago by Aston University, which looked at the relationship between high performance HR management and positive healthcare outcomes. This analysis found that almost 8% of the variance in mortality rates experienced by hospitals was a consequence of HR practices, notably performance management, training and development and job security within the overall employment deal.
So we have evidence from both the commercial and healthcare sectors that there is a strong correlation between effective people management practices and organisational performance. I guess this is something that we as HR practitioners would feel intrinsically and of course, these findings are supported by the work McLeod and Clarke have done on engagement and is this link underpins the whole Investors in People initiative. Why then is there still a debate about HR being “at the top table”, that is, having the degree of influence it deserves, based on the impact of people management on bottom line performance? And it is not an issue that goes away. It was reported in Personnel Today last week that senior HR staff are not always involved in the development of the organisation’s strategy, nor indeed, the HR strategy.
What do we believe the experience to be in public sector organisations; at a time when change is a constant, the introduction of new organisational operating models is high on the agenda and we are striving to increase productivity levels, are HR exerting the influence they should? Are public sector organisations investing the time necessary in people strategies and workforce plans? If not, what is it that is holding HR back?
My own view is that attendance at Board meetings, having that place at the “top table”, is symbolic more than anything. The key thing is to be in a position to exert influence. It is crucial that HR is not just seen as a “support” function, but is being proactive, helping to shape the future of our organisations. The extent to which the HR function in any individual organisation can play such a role is not entirely within their own gift. Much depends on the attitude of other senior managers, particularly the Chief Executive, towards HR. Will the organisation listen and be influenced? How strong is the voice of other players, notably the finance community? Does HR have the gravitas it needs?
Our ability to influence will be affected by the receptiveness of the organisation itself, but this receptiveness will in most cases be impacted on by the experience the organisation have had of HR. Has it deserved a strong voice? Has it demonstrated a willingness and capability of offering more than just support and been able to present what it does in ways that shows the positive impact HR and good people management practices can have on the performance and efficiency of the organisation? Whatever the experiences of the past, the key issue is are HR practitioners in the public sector ready to grasp the opportunity that we have now? What is that may hold us back; is it capability, or is it about confidence? I cannot do a blog at the moment without making reference to the Olympics. What has enabled our athletes to go faster, jump higher and be stronger is capability yes, but the difference between being a medallists and not is often about confidence and belief
At the PPMA we have been thinking about what we can do to help our profession grasp the opportunity that presents itself; how can we help HR professionals working in public services develop the skills and confidence they need. Some of the areas of development we are identifying are around:
– The use of HR metrics
– Influencing skills (particularly in a political environment)
– Building confidence
I would be very interested in your assessment of whether public sector HR people have the level of influence that they need and whether the areas for development that the PPMA has started to identify are the right ones.