Recent study shows impact of HR competencies on business performance

Abstract

© 2012 Dave Ulrich Published online in Wiley Online Library (wileyonlinelibrary.com). DOI 10.1002/ert.21348 For the past 25 years, the University of Michigan and the RBL Group, together with research partners from around the world, have conducted the Human Resource Competency Study. Every five years, thousands of HR professionals and their line associates have been involved in the study. The most recent round was completed in 2012 with over 20,000 global participants. This article reviews the most recent findings and explains their implications for the HR profession. This research begins with the assumption that HR professionals should shoulder responsibility for being the best thinkers in the company about the human and organizational sides of the business. They should be the corporate thought leaders in framing the HR strategy through which the people and organization may be positioned to create competitive advantage. They ensure that people and organizations are created and sustained to optimally deliver value to external and internal stakeholders by implementing the business strategy. They partner with line executives in the fulfillment of these responsibilities by engaging line executives in developing, approving, and implementing human and organizational agendas. To fulfill these purposes, HR professionals must have the knowledge, insights, skills, and experience that are most relevant for the companies and competitive markets within which they add value. Given the accelerated rate of turbulence in almost every aspect of business, maintaining knowledge, insights, and skills that are relevant at any given time is no small feat. The percentage of global wealth that is created in one country and is transmitted and consumed by other countries continues to rise at an increasing rate. Increased globalization is facilitated by the remarkable decrease in the costs of communications (e.g., Skype). While costs of communications are decreasing, the speed of communications continues to exponentially increase (e.g., Moore’s Law). Such communications build communities of networks that a few years ago would have been impossible (e.g., Facebook). Such networks reduce coordination costs and enhance the market power of consumers (e.g., Craigslist) and the bargaining power of employees (e.g., Glassdoor). Technological advancements not only facilitate communications but also accelerate product and service development on a global scale (e.g., Innocentive.com). In the midst of technological change, we see a decrease in performance combined with an increase in the aging workforce and uncertain immigration laws. As a result, the United States (as an example) is facing a conspicuous shortage of skilled labor. As the supply side of labor becomes more problematic, uncertainty on the demand side likewise increases with a greater percentage of gross domestic product