According to a new report, organisations with a comprehensive approach to people management perform better than those without, indicated by higher profits per employee, higher profit margins and higher productivity.
The two-year study, ‘People and the Bottom Line’, has been produced by the Work Foundation and the Institute for Employment Studies (IES) and supported by the Department for Innovation, Universities and Skills (DIUS), the Department for Business Enterprise & Regulatory Reform (BERR), Investors in People UK, the Sector Skills Development Agency (SSDA) and the University for Industry (UFI).
The researchers set out to develop and test a framework of people management practices with nearly 3,000 employers to assess their impact on organisational performance. Their analysis suggests that organisations which adopt a range of people management practices – from resourcing to employee engagement, skills development to job design – can achieve substantially stronger performance than employers that invest in just one area.
David Lammy, Parliamentary Under-Secretary of State for Skills, said: “This report represents an important development in understanding the extent to which good people management lies at the heart of successful organisations. This is vital information for all companies operating in today’s competitive economy. I would encourage
employers to take note and consider how they can use the findings to up their game.”
Simon Jones, Acting Chief Executive at Investors in People (UK), added: “This is a ground-breaking study. It delivers compelling evidence of the role that a proactive approach to people management and skills development can play in business success. It shows that people management must be woven into the DNA of any organisation that wants to maximise its performance – it cannot be piecemeal or tokenistic. This is a very important report for employers of all types and sizes and it’s vital they sit up and take notice.
“The good news for employers that want to check the effectiveness of their HR practices and identify opportunities for improvement is that the report also offers a practical framework for doing so. I urge employers to take a serious look at how it could help them seize the business opportunity on offer.”
The report lists 12 core measures that it says that are most effective in helping employers track the impact of their people management practices on business performance. These cover areas as such as recruitment, development plans and employee appraisals.
www.employment-studies.co.uk
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