Proving the Obvious? Good HR is Good Business, Study Finds
July 24, 2006This from Tampa Bay Business Journal via the ManagersRealm blog:
According to a recent Gevity Institute study, certain HR practices result in measurable business results.
The study found that small businesses that follow a set of “workforce alignment” employee management strategies achieve 22.1 % higher revenue growth, 23.3 % higher profit growth and 66.8 % less employee turnover than others.
The strategies examined included:
- Hiring employees to fit in with company culture rather than just based on a job candidate’s individual skills.
- Trusting employees to manage themselves rather than enacting strict controls.
- Using company socials and creating a “family-like environment” rather than trying to motivate employees solely through monetary incentives.
Even if a company does not implement all the workforce alignment strategies, following any one of them would still have these benefits, though to a lesser extent.
Tampa Bay Business Journal: “Gevity study suggests good HR means growth”
There are some legal risks to these strategies. They likely do not outweigh the benefits if done right, but need to be watched.
Hiring employees to fit in with company culture may be discriminatory if interpreted as “hiring people like us,” and existing workforce is not diverse. I don’t think this is intended, but a simplistic reading of the article could suggest it.
Also, a “family-like environment” can result in harassment claims if it encourages employees to be too casual and familiar. “Company socials” are notorious for being situations in which employees, loosened up by drink, say and do regrettable things.
Just a word of caution about implementation. Otherwise, the results are encouraging and the strategies certainly worth trying.
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Comment by Bruce Lewin
Intriguing stuff :-) Always good to see numbers and robust stories being associated with HR…