AUSTRALIAN HR professionals are struggling to understand the quantifiable value they can deliver to their organisations and are in danger of being outsourced, according to international HR and recruitment expert Dr John Sullivan
AUSTRALIAN HR professionals are struggling to understand the quantifiable value they can deliver to their organisations and are in danger of being outsourced, according to international HR and recruitment expert Dr John Sullivan.
In a sobering wakeup call to HR, he said that practitioners who can’t prove ROI will be replaced.
“If you can’t show that HR can dramatically increase the output of that huge chunk of corporate expenses, you will be outsourced,” he said.
“Soft dollars are irrelevant. I have not found a CEO on the planet who will pay attention to soft dollars.”
He said HR too often spends money on “silly stuff nobody cares about”, and pointed to Watson Wyatt research which found that HR spending is misaligned when it comes to management expectations.
The research found that managers ranked recruitment and retention as their second and third highest HR priorities, while HR’s spending put them at 36th and 44th place respectively.
“You can’t improve what you don’t measure,” said Sullivan. “Once you measure HR performance, it’s possible to direct spending into the areas with the best return.”
One of the simplest but most effective HR strategies was talent retention, followed by talent attraction, according to Sullivan. “We have found that top performing employees produce ten times the output of average performers in the same position,” he said.
He pointed to case studies across a variety of industries to illustrate how companies that managed talent attraction and retention more effectively than their competitors were vastly more productive and profitable.
Speaking at a conference ‘Make HR a profit centre - Metrics for the new HR’, organised by Specialist News, Sullivan believed that Australian HR practitioners struggle to understand the basic concepts of good attraction and retention policies and the quantifiable difference they can make to the bottom line.
“There certainly is a reluctance to embrace change in HR here because of a fear of laws and the unions, so that can make change a little slower,” he said.
“I would say Australia is two years behind the US, to be polite.”
While he acknowledged that there were some practitioners who had embraced modern HR thinking and the benefits of metrics, he noted that there was also a lag in adopting the latest technologies.
“In the business world you have to be as fast as your best competitor, and I’m not sure that people in Australia realise that you can’t be an isolated country,” he said.
“No one can be isolated with the technology available now, so people can steal your talent or take advantage of your talent all around the globe.”
