Tuesday, August 29, 2006

New Analysis Shows HR Improves Profitability

In a nice counter piece to HR being reptiles, new analysis is about to be published in Personnel Psychology that reveals that rather than HR being detrimental to an organization, it in fact adds real bottom line value.

Using mathematical analysis of 92 previous studies, researchers have found that human resources activities created a 10% - 20% improvement in employee retention and employee productivity as well as a similar improvement in profitability and stock price.

Even more telling perhaps is that companies that cut back on human resources activities can expect a 10% - 20% reduction in their bottom line.

"Over the last 25 years, corporate America has debated whether the human resources function adds value or if it is just a necessary evil," noted Dave Ketchen, study co-author and Lowder Eminent Scholar at Auburn University. "Our results show that negative images of human resource managers miss the mark. Skilled HR managers can make the difference between a company making a profit or losing money."

There are no more snakes on this plane.

2 Comments:

Blogger Ajit Chouhan said...

So finally we know that HR does some value add :-)

5:50 AM, August 30, 2006  
Anonymous Anonymous said...

Thanks for discussing our study. I hope the results make a difference in the way CEOs make certain decisions.

Dave Ketchen

2:44 AM, September 01, 2006  

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