HR strategy 'more likely to make firms profitable'

Companies with a documented human resources (HR) strategy are more likely to turn a profit, a survey has found.

A study of 1,000 organisations across 46 countries, including the Republic, concluded that those that explicitly integrate HR policy into their general business objectives perform better.

Revenue per employee was 35 per cent higher than in firms lacking a clear HR strategy. Absenteeism levels were much lower.

Ominously, 41 per cent of Irish companies do not have a documented HR policy, the research by analyst PricewaterhouseCoopers established.

Only 22 per cent of organisations in the Republic were satisfied with the influence HR exerted on forward planning. Some 20 per cent monitor employee satisfaction, a drop from 53 per cent on the last such survey, conducted in 2000.

Ms Bernadette Breen, senior manager of PricewaterhouseCoopers HR services in Ireland, said businesses should pay heed to its conclusions.

"Our research clearly demonstrates that effective people management does add value to organisations by putting the right policy and practices in place to create a good employment environment.

"This, in turn, has a positive effect on a range of issues, from reducing absenteeism to improving profitability," Ms Breen said.

"The link between the existence of a documented HR strategy and employee productivity is particularly interesting.

"It is reasonable to assume that the discipline of identifying the implications of the business strategy on people makes planning more realistic and achievable."