by Tom Deloose
A frequent topic of conversation during our (early evening) Vandelanotte parties, contained in many - often unsubtle - LinkedIn posts and in many an insightful tweet from ‘influential’ economists is whether there is ‘a correlation between a company’s efforts in human resources and its financial results’. Moreover, if there is such a link, which HR indicators have the most significant impact on a company's financial performance?
Research firm McKinsey recently published a comprehensive study on this, based on real figures, confirming what we were all thinking: that simple external motivation through increasing wages ultimately makes little difference. Conversely, they found that, besides fair remuneration, creating transparent opportunities for internal mobility and training pays dividends. Implementing such practices injects companies with new life, making them more flexible and resilient, while also reducing staff turnover. Achieving such conditions will only serve to improve your company’s results, including your figures.
The McKinsey study compared four types of companies:
Companies that focus on both financial performance and a robust HR policy (with a strong focus on internal mobility and training) score significantly higher in terms of both finance (profit and ROI), retention (internal mobility and staff turnover) and resilience (outperformance and growth even under COVID conditions) than organisations implementing a more unilateral approach.
It should come as no surprise that the recent labour agreement requires Belgian companies with over 20 employees to draw up training plans, while also mandating that they organise minimum four days of training for every employee starting 1 January 2023. The purpose of this is to encourage businesses to implement this more balanced, broader view of financial KPIs and HR topics. Every company concerned should therefore be in a position to submit a solid training plan to the social inspectorates by 31 March 2023 at the latest, as well as providing four days of annual training to its employees.
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