BUSINESS SUCCESS

Best HR practice impacts business success, study reveals

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There’s a distinct correlation between sound HR practices and company performance, an international study has shown – and for African companies, the trend is no different.

Research by the Top Employers Institute and the HR Certification Institute has revealed that on average, Top Employers consistently outperformed their peers on a number of key metrics.

“To determine whether the Top Employers Certification is correlated with better business performance, data analysts examined companies that have received their certification since 2011 on key metrics,” the report reads. “The findings show that companies that have achieved Top Employers certification since 2011 are not only more highly regarded, according to employee ratings on employer review & assessment platforms like Glassdoor and Kununu, they also show stronger stock performance and compounded five-year revenue growth rates.” 

The report, entitled 'Emerging Evidence: Business Performance and the Validation of Human Resources Best Practices’, found that stock prices during 2011 – 2016 of companies certified by the Top Employers Institute outperformed the stock indices in their respective countries by an average of 51%.

In addition, Top Employers also grew faster than their peers in the space of five years. “Compounded revenue growth rates of companies certified by Top Employers outperformed relevant industry average compounded growth rates by 14% when comparing 2010-2014 revenues,” the report explains.

In Africa, the companies that achieved the Top Employers Africa 2016 Certification (certified in a minimum of four African countries) included multinationals like AbbVie, Becton Dickinson, DHL, EY, G4S, Old Mutual, Orange and Unilever.

Abbvie, Becton Dickinson, DHL, EY, G4S, Old Mutual, Orange (including Orange Business Services Egypt and Mobinil) and Unilever.All of the above achieved positive results in the same year or have projected growth going forward.

Sound HR practice is a key driver of success, but many business leaders are unsure how best to harness it. According to the report, 60 years into the digital revolution, our society and businesses are no longer driven by the key factors in the industrial age – increasingly, the most powerful tool in a business’ toolbox is the human brain. “Optimizing the effectiveness of today’s human assets is a top concern for business leaders, but many organizations are unsure how to select or deploy talent practices that will drive business performance,” the report says.

Marcus Buckingham, performance consultant and author, adds that there’s also a gap between understanding the principles and ultimately implementing them. “In 2016, most CEOs will tell you that talent is their organization’s most precious asset, and that their culture is their best competitive advantage. Yet for many companies there remains a gaping hole between that rhetoric and reality.”

So what is it that makes a Top Employer? The Top Employers Institute – the only company worldwide that certifies HR Best Practices globally – evaluates organisations in nine key areas. These include talent strategy, workforce planning, on-boarding, learning and development, performance management, leadership development, career and succession management, compensation and benefits, and culture. Participants to the Certification Programme need to achieve a minimum score of 60% in order to be certified as a Top Employer.

The Top Employers Africa 2016 Certification Programme’s data shows the following with regards to the continentally certified organisations: 92% have a clear link between the talent strategy and business strategy. A strong 59% conduct an analysis of learning and development results in relation to business performance; and 96% use a goal cascading method to ensure that individual performance goals and objectives are aligned with the organizational strategy. In addition, a whopping 99% of Top Employers Africa 2016 organisations’ performance management process allows for the adjustment of objectives in the year in response to changing business needs.

For Unilever,who achieved the Top Employers Africa 2016 Certification this type of strategy has consistently kept it on the group of Certified Top Employers. Unilever says that it’s HR practices have been exceptionally helpful; most notably, its responsive talent strategy to address global challenges like climate change, food security, health and nutrition, as well as sustained livelihoods and women empowerment. Its ‘Connected 4 Growth’ strategy is centred on increasing resilience and agility as a business, and staff are encouraged to work on purpose-driven projects that will make the future brighter for the 1 billion Africans on the continent.

“Unilever’s business is centred on people, and they are the reason for our success,” says Rachelle Harmsey, Leadership Director – Africa at Unilever. “We place great energy in ensuring that through our policies and ways of working, we support the creation of a positive employment experience from the point of attraction, to selection, to the development and retention of talent. Our ambition is to remain a successful business, with great people and a great place to work.” The company places a strong focus on developing African leaders for Africa, says Harmsey, which benefits both the business and local communities.

On 13 October 2016, the Top Employers Institute will hold its annual Certification Dinner, in which the Top Employers for 2017 will be publicly announced and certified.

“Companies who are awarded the Top Employers Certification are able to benchmark themselves against leading organisations in HR as well as improve their HR practices based on the opportunities of growth identified in the HR Best Practices Survey,” says Samantha Crous, the Top Employers Institute’s Regional Director for Africa.

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