The Society for Human Resource Management published the results of a study not too long ago that revealed that an average of 105% more profit was earned by companies that have a Senior HR professional in the executive suite than those that do not, in the same industry.
As a Human Resources professional, I know what an experienced, educated professional can bring to the table and all the benefits their organization can reap. As a consultant, over the years, I have seen what companies can lose by not having an HR professional.
The report of the study, written by Dinah Wisenberg Binn, found that Fortune 500 companies with a senior HR leader in the C-suite are, on average, 105 percent more profitable than their industry peers that don’t have an HR person in the top executive ranks, according to a recent analysis by SuccessFactors, a SAP AG company.
The findings illustrate the importance of HR executives in strategic planning and the need for strong company HR operations, SuccessFactors reports. They found a strong correlation to a company’s bottom line, demonstrating the important connection between effective talent management and business performance. And, “Companies with both a higher percentage of goals aligned with corporate objectives, and identified HR risks, have better financial and market performance.” said Shawn Price, president of SucccessFactors, SAP Cloud, in a news release.
CHROs embrace best practices such as active talent management, and certain HR tactics correspond to superior financial performance, SuccessFactors said. Among other results, the survey found that companies that identify HR risks in their annual reports outperform their peers in such metrics as operating profit, earnings per share and return on assets.
Businesses that review employee performance year-round meet quarterly financial estimates and achieve better compound annual growth rates than those that review workers annually, the survey revealed.
As a Human Resources professional, I am happy to find that SuccessFactors, has validated what I tell my clients and potential clients all the time. Human Resources is not a necessary evil – it’s an important function of a successful business. That’s why my tag line is “The Strategic Human Resources Partner You Need to Protect and Grow Your Business.”