Creating People Advantage, BCG's leading HR survey conducted jointly with the World Federation for People Management Associations, reveals that getting HR right is more important than ever for competitive advantage. Here are the critical trends shaping HR and people management:
Companies that have strong capabilities in HR topics—such as talent and leadership; engagement, behavior, and culture management; and HR strategy, planning, and analytics—show significantly better financial performance than companies that are weaker in those areas.
HR leaders who want a role in strategic discussions with the business must be able to quantify workforce performance. This goes beyond “input” metrics, such as cost and head count, toward more sophisticated “output” indicators, such as productivity.
Even many high-performing organizations, which are generally more data driven, don’t use their KPIs systematically to formulate strategic actions. A clear prioritization and selection of KPIs and tools is needed to achieve the best results.
Many organizations need to invest in HR more strategically to build capabilities. Among the HR topics rated as most important, companies showed only average capabilities, and they weren’t specifically targeting their investments to improve those areas.
Non-HR respondents reported a strong need for action with regard to approximately 40% of HR topics, particularly in core HR capabilities, such as staff capabilities and communication.