HR FUNCTIONS will be placed under more scrutiny as increased competition for scarce resources within companies has created a greater need for measured returns on investment in the workplace, according to global research firm Gartner
HR FUNCTIONS will be placed under more scrutiny as increased competition for scarce resources within companies has created a demand for measured returns on investment in the workplace, according to global research firm Gartner.
“The return on investment in a human capital program is harder to measure than more tangible investments in assets such as new products, acquisitions and facilities,” said Andrew Walker, director at Gartner.
“However, organisations are not only asking for returns on investment in the workplace, but also drastically reducing the cost of the workforce all together.”
Citing a Gartner report, which examines the importance of measurement programs and how to implement successful processes, Walker said programs could be measured for overall success with combined metrics for management and HR performance in the process.
Different measures could be used to assess the front-end work performed by HR from the execution conducted by managers, he said, while an integrated scorecard format using recognised benchmarks enabled stakeholders to define and agree on the dimensions of HR/IT performance that contribute most to IT and business objectives.
“The ultimate success of a human capital management program stems from a smooth handover to the business unit direct management in a way that they see the value of it, take ownership, learn the necessary skills, and use the tools of the program to become better managers of their people and to leverage higher work performance,”Walker said.
Measurement can be beneficial in supporting the business case for human capital management programs, he added. “To sell the business value of human capital management, HT/IT professionals must work with their business partners in IT to prioritise change strategically and demonstrate how each proposition supports IT in gaining a competitive advantage.”
HR metrics can be used for measuring impact on IT and business results, the report, Measuring the contributions of your most important asset – your people, stated.
They were not used just for measuring and comparing year-on-year performance, Walker said. Such measures could be used for many years as indicators of the potential savings and per capita revenue growth to be gained through alliances.
