FOR EVERY DOLLAR Australia’s best employers spend on HR, the rest spend a dollar and fifty cents
FOR EVERY DOLLAR Australia’s best employers spend on HR, the rest spend a dollar and fifty cents.
Recent analysis of the Hewitt Associates’ Best Employer research reveals leaders in the field align their people strategy with the business strategy, and in doing so, are successful at achieving high levels of synergy across the HR function.
“The best invest their HR budget in those areas that matter most to achieving the organisation’s strategic objectives and achieve greater return on their investment,”said Brigit Douglas-Raper, project manager for Best Employers in Australia and New Zealand.
She said best employers focus on a select few things and do these things well – a trend which is being replicated across the Asia Pacific in similar studies.
However, despite concerted effort and heavy investment to transform HR to be more strategic, many still fall short. Recent Hewitt research in the US found many organisations are ‘stuck in the middle’– saddled with new investments in technology, processes and labour, but not yet accruing the strategic and financial benefits of a more progressive HR model.
“Investments in technology and the consolidation of HR delivery in many cases are not freeing up HR professionals to spend more time on business partners’ activities,” Douglas-Raper said.
The research suggests that two major reasons for HR being stuck in the middle include an unclear vision for HR and poor change management.
“It is clear that in order for HR to be effective, it needs to build collaborative relationships with line managers so as to ensure that the HR vision is grounded in what employees and managers need to successfully do their jobs,” she said.
“In addition, in managing change, HR needs to involve line managers and employees in the design and implementation phases of change.”
This partnership with managers across the business ensures HR spend achieves its bang for the buck, according to the analysis of the Best Employers research.
The analysis also found that over the past three years, the average HR spend in organisations has increased by 33 per cent. However, Douglas-Raper said that when HR spend per employee is examined, there is little indication of growth or decline in the amount that organisations are spending on their HR activities (see box).
Over the past five years, Hewitt has collected data from more than 300 organisations as part of the Best Employers in Australia and New Zealand study. The study aims to identify organisations that create strong and sustainable business results by engaging their employees and aligning their people practices with business strategy.
