Creating people advantage 2013: Lifting HR practices to the next level

Companies throughout Europe know they need to improve their people management capabilities if they are to succeed in a business environment marked by economic uncertainty and talent shortages. Yet they often struggle to translate these HR aspirations into specific actions. A report by The Boston Consulting Group (BCG) and the European Association for People Management (EAPM), gives clear, quantitatively derived guidance to companies on how to strengthen their people management skills.

The report, Creating People Advantage 2013: Lifting HR Practices to the Next Level, is the seventh in an annual series examining critical trends in managing people. This year’s research drew survey responses from more than 2,300 executives across a broad range of industries, in 34 countries throughout Europe. The author team supplemented those findings by conducting in-depth interviews with 36 HR leaders. Among the survey population, the authors analyzed people-management capabilities in 10 key areas, along with the efficiency of companies’ efforts to improve.

Identifying Root Causes of Success

“Company leaders understand the need to enhance their capabilities in key people management areas, but they don’t have a playbook for where to start or which measures should be priorities,” said Rainer Strack, a senior partner at BCG and coauthor of the report. “Our goal this year was to provide a set of differentiating activities—the most effective drivers of success across 10 HR areas.”

In the area of talent management and leadership, for example, the research results indicate that highly capable companies have several activities in common. They identify and promote promising employees using processes that are transparent, efficient, and enterprise-wide, breaking down silos and accessing the widest possible talent base. Best-in-class companies also plan talent and leadership needs on a long-term basis, rather than reacting only to the most pressing needs. And they apply consistent leadership criteria, ensuring that all employees feel they have a fair shot at rising through the ranks.

Similarly, in the area of HR analytics, the survey results show that highly capable companies are more likely to build big data models. They have a clear and well-developed system for measuring HR and workforce key performance indicators, giving them the foundation to build predictive models regarding workforce performance, and they make HR decisions based on hard evidence instead of gut instincts. In addition, these companies accurately predict the job profiles they’ll need to execute their strategy, by business unit, geography, and critical skills needed. 

“For companies seeking to improve their performance in talent management and leadership, these measures should be considered high priorities,” said Filippo Abramo, president of the EAPM and a coauthor of the study.

Other areas analyzed in the report include:

  • Performance management and rewards
  • HR communications and social media
  • Training and people development
  • Diversity and generation management
  • Recruiting: branding, hiring, and onboarding
  • Labor costs, flexibility, and restructuring

Real-World Examples

Rounding out these findings is a set of in-depth case studies that illustrate strong HR performance in the real world. Companies profiled in the report include people management leaders such as Société Générale, Henkel, E.ON, and Deutsche Bahn, among others.

Through this combination of quantitative and qualitative analysis, the report sheds much-needed light on a topic that will be critical for the success of European companies moving forward.

Lifting HR Practices to the Next Level is part of the Creating People Advantage series that BCG has published annually since 2007, together with the EAPM and the World Federation of People Management Associations (WFPMA). 

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