PWC: HR strategies increase profit

A global human capital survey by PricewaterhouseCoopers (PWC) has found that businesses which implement a documented human resources strategy are more profitable and benefit from an average of 35 percent higher revenue per employee.

The survey, which was conducted among over a thousand organisations in 47 countries, also found only half the companies which participated integrate human resource (HR) strategy closely with overall business strategy.

PWC found there was “powerful evidence” that good people management had a positive effect on staffing issues, from increasing productivity to reducing absenteeism and improving profitability.

Companies therefore need an HR strategy that is documented and integrated into business strategy; effective people policies which deliver that strategy, and an HR function which can implement policy and strategy.

South Africa
Twenty-five organisations participated in the South African survey, of which 11 were from the financial services sector.

PWC found most do not have an official documented HR strategy, even though HR leaders are in most organisations members of top leadership teams.

South Africa has a higher ratio of full-time HR specialists than all other regions, possibly due to equity legislation, while the country employs more females than other countries.

There is also a higher average of training days per employee provided by local organisations, which offer five days as opposed to the global average of three.

South African organisations see their top business issue as revenue growth, while others surveyed considered cost reduction their priority, “perhaps suggesting that the South African economy is in a growth phase,” PWC said.

The survey looked at “HR benchmarks that influence business performance,” according to PWC HR consulting division senior manager Sally Turvey.

“The challenge for HR is to invest more time in developing 'evidence-based' approaches to managing people,” she said.

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