It's official: Companies with effective HR directors are more profitable

A new study confirms what HR leaders already know: workforce investment is tied to better financial results.

It's official: Companies with effective HR directors are more profitable
A global study has discovered what APAC HR professionals already know.

More emphasis on workforce development has a positive impact on the bottom line, according to Workforce2020 – an international study from SAP SE and Oxford Economics – which was released on Tuesday.

Key findings of the study – which analysed high and low performing companies across Asia Pacific – included the fact that high-performing APAC companies recruited, invested in and retained the best talent.

"Companies in Asia Pacific are undoubtedly growth-driven and Workforce2020 is a reminder that growth is tied to strong workforce development," SAP Asia Pacific Japan senior vice president, human resources, Jairo Fernandez said in a statement.

"Key to managing human resources well is finding, supporting and driving the right talent.

“At SAP, we see our strong growth coming from our super awesome people helping customers run better, run simple."

Sixty-four percent of high-performing Asia Pacific firms were found to be satisfied with the quality of job candidates, compared to 56% of firms with below-average profit margin. 

Top-performing companies were also found to prioritise workforce issues at a far higher level than lower-performing companies, with 77% of executives at high revenue growth APAC companies saying workforce issues are already driving strategy at the board level.

That is in contrast to 64% of low performing companies.

Interestingly, 40% of underperformers said they had ample budget and resources dedicated to developing talent, in comparison to only 23% of high performers.

Thirty-five percent of low performers said that when a staff member with important skills leaves, they tend to fill the role from within the organisation.

High performers, in comparison, were likely to recruit externally, with only 23% of key roles filled from within the company.

Executives at high-revenue APAC growth companies also said technology skills were well-represented at their organisation, outperforming low growth firms: analytics (62% versus 55%); office productivity software (58% versus 49%); and digital media (36% versus 27%).

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