For years enlightened business leaders have recognized the obvious: Hire great people, treat them well, and your business will flourish. For those leaders who haven’t recognized this yet, there may be a new motivation to get on the bandwagon.
Moody’s Corporation, the bond rating service, has started recognizing “a direct connection between financial performance and success in recruiting and retention.” Knowing this, they are now starting to use talent management as a factor in the process of rating companies. In addition, Watson Wyatt has developed a “human capital index” and has found that good people practices can increase a company’s value by as much as 30%.
What does this mean to you? Picture the CEO of a publicly traded company explaining what he plans to do to improve the retention of employees at a shareholder meeting, right after he explains his plans to grow revenue. Suddenly those employee relations activities that are often delegated to the lowest levels of the organization are now in the limelight.
This doesn’t mean that my humorous attempt to improve employee morale by including a wet bar, hot tub, and masseuse in my department budget proposal years ago is any more likely to get approved now than it was then. However, there should be more scrutiny of those items that truly do impact the selection and retention of a company’s most valuable asset.
HRM Innovations, LLC is available to help with any questions you may have on HR or Management related topics and can be contacted at: Kevin@HRMInnovationsllc.com or 269-615-4821.