Mumbai: People management with HR best practices holds the key for achieving desirable business results including shareholder returns.
Better business performance, on the basis of indicators such as higher stock prices, faster revenue growth and more favorable perception of companies’ employer brand, is correlated both with company-wide certification of HR best practices and with the employment of a proportion of HR- certified professionals according to new research conducted by Top Employers Institute and HR Certification Institute® (HRCI®).
“Certification of HR best practices applied by employers as well as HRCI certification of HR professionals correlates with improved business results and companies’ employer brand perception,” said Top Employers Institute CEO David Plink.
More specifically, the joint research conducted this year by Top Employers Institute, an independent global organization that certifies excellence in HR practices and the environment employers have in place for employees to advance their development, and HR Certification Institute, the leading professional credentialing organization for HR professionals worldwide, found some interesting and insightful trends such as higher share prices, faster revenue growth, and positive co-relation with employer brand perception.
Stock prices during 2011-2015 of companies certified by Top Employers outperformed the stock indices in their respective countries by an average of 51% over the same five-year period.
Compounded revenue growth rates of companies certified by Top Employers outpaced relevant industry average compounded growth rates by 14% when comparing 2010-2014 revenues.
Stock prices of companies with more than five HRCI-certified professionals have posted an average growth of 95% during 2011-2015, while the relevant indices (NYSE, NASDAQ) rose an average of 38% over the same five-year period. Hence, companies with more than five HRCI certificants outpaced relevant stock indices by 57% over the five-year period.
The story does not end here. Compounded revenue growth rates of companies with more than five HRCI-certified professionals rose 33% during 2010-2014, while the compounded revenue growth rate of relevant industries grew 8% over the same period. Therefore, companies with more than five HRCI certificants outperformed relevant industry with a wide margin of average compounded growth rates by 25% over the five-year period.
“HRCI certification correlates both with better results for the individual certified HR professional, as we previously demonstrated through our 2015 large-scale value of certification study, and also for the companies that employ them, as these new findings suggest,” said HR Certification Institute CEO Amy Dufrane, Ed.D., SPHR, CAE.
Another key finding of the research report is positive correlation between employer brand perception and both certification of companies by Top Employers and companies employing more than five HRCI-certified professionals.
The average rating for Top Employers certified companies on Kununu is 3.5 stars (out of 5) vs. the overall Kununu average of 3.1. The average rating for Top Employers certified companies rated on Glassdoor is 3.5 stars (out of 5) vs. the overall Glassdoor average of 3.2.
The average rating on Glassdoor for companies with more than five HRCI certificants is 3.5 stars (out of 5) vs. the overall Glassdoor average of 3.2.
The paper concludes that HR best practices, like best practices in general, have potential to boost business performance, which will generate desirable results.
About Top Employers Institute
Top Employers Institute, headquartered in the Netherlands and founded in 1991, is an independent organization that certifies excellence in HR practices and the environment employers have in place for employees to advance their development. For 25 years, Top Employers Institute has certified exceptional employers around the world with its annual Top Employers Global, Top Employers Continental, and Top Employers Country certifications.
About HRCI
HR Certification Institute (HRCI) is the premier professional credentialing organization for the worldwide human resources profession. Founded in 1976 and headquartered in the United States, HRCI is celebrating 40 years of setting the standard for HR mastery and excellence around the globe.
