HR Best Practices Drive Business Performance

By Barry Lawrence, HRCI Staff Blogger

Automobile innovator Henry Ford once asked, “Why is it every time I ask for a pair of hands, they come with a brain attached?”

Today, more than 60 years into the digital revolution, Ford’s remarks seem quaint at best. Companies recognize the importance of managing collective brainpower – the people or human resources that now drive critical business functions in the knowledge economy.

But what is it that really sets the stage for successful people management practices at high-performance organizations where “thinking workers” are the difference between good and great?

HR Best Practices Matter

New research commissioned by HR Certification Institute^®  (HRCI^®) and Top Employers Institute, Emerging Evidence: Business Performance and the Validation of HR Best Practices, sheds light on the importance of adopting HR best practices that are:

• Measurable.
• Applied by top HR professionals in the world.
• Adapted carefully and strategically across an organization.

“Best practices in general have the most impact on business performance if they are embraced company-wide, starting at the top, and adopted smartly and sensitively by expert individuals,” according to the report.

Read more about the value of HR best practices in this breakthrough report from HRCI and Top Employers.

Certification Matters

The report also provides good news for the certification community! Certification – both at the organizational and individual level – is positively correlated with important measures of business performance.

The report notes that HRCI credentials assist companies in identifying professionals who have the knowledge and practice-based experience needed to make meaningful HR best practice decisions. At the same time, certification with Top Employers ensures leadership to implement best practices across the organization.

Businesses Are the Winners

The new findings provide exciting examples about the ROI value of HRCI certification. The analysis of nearly 100 companies, with more than five HR professionals with HRCI credentials, found that:

• Stock prices outperformed the relevant stock indices (NYSE, NASDAQ) by more than double over a five-year period, 95 percent vs. 38 percent.
• Compound revenue growth rates grew 33 percent from 2010 to 2014, compared to 8 percent for relevant industries.

  HRCI certification may also impact job satisfaction throughout an organization. A similar analysis of the Glassdoor ratings of more than 200 companies found that:

• Glassdoor ratings were 3.46 (out of 5) at companies with more than five HR professionals with HRCI certifications vs. the average company rating of 3.20.

Similar results were found for organizations receiving certifications from Top Employers.  Multinational companies with certifications from Top Employers also had significantly higher stock prices, compound revenue growth and job satisfaction ratings.

HR Driving Results

Other recent studies, such as an HRCI-commissioned analysis from the Human Resources Research Organization (HumRRO), have also found similar linkages between certification and increased business value.

In addition to providing HR professionals with numerous career advantages, supervisors in the HumRRO study reported that HRCI-certified practitioners perform at higher levels of excellence, are more effective at carrying out strategic HR tasks and have more experience in core HR bodies of knowledge.

“Our findings build on previous research to deliver the clear message that exceptional human resource management – from applying HR best practices to the competencies of the HR professionals who design and implement them – can demonstrably and positively contribute to the bottom line,” said Top Employers Institute CEO David Plink in the press release announcement.