Human Resource Competency Study - Round 8
Since 1987, the Human Resource Competency Study (HRCS) has gathered data on HR professional competencies every 4 to 5 years. Co-Sponsored by Ross Executive Education at the University of Michigan and The RBL Group, the 8th round of the HRCS was conducted from mid-September 2020 through February 2021. With partnership from AHRI and other global HR associations, data was gathered through 360 ratings on 3,594 HR professionals with assessments from a total of 28,640 colleagues from within HR and from the business.
Overview of Overall HRCS 8 Findings
Our first general analysis consisted of using multiple regression to examine how the three major components of our study impact business results and this analysis revealed two important results. First, we would note that the three components together explained over 25% of the variation in business results. One way to think about this is to consider all of the variables (business strategy, economic conditions, direct competitors, products, customer preferences, etc.) that could cause the variation in business results (i.e., why one organization performed better than another). Our findings suggest that one-quarter of the variation in the 1,013 organizational units in our study is accounted for by the three components we examined.
| HR Impact on Business Results | Business Results* (N=1013) |
|---|---|
| HR Competencies | 3.5% |
| HR Department | 48.2% |
| Business Capabilities | 48.3% |
| Overall Variance Explained | 25% |
Second, the numbers in figure 6 provide a measure of the relative impact of the three components in explaining that 25% of variation. Our data suggest that he competencies of individual HR professionals have a very minor impact on business results (3.5%) relative to the impact of the HR department (48.2%) and the business capabilities (48.3%). While at first glance this may seem disappointing, it is not at all surprising. These findings confirm the results of the HRCS Round 7 that found the impact of organizational characteristics far outweighed the impact of the HR competencies. The higher impact of organization over talent on business results has been found by others (see work by Luigi Guiso, Kai Li, Benjamin Schneider, Charles A. O’Reilly and Victory Through Organization). In addition, the individual HR competencies, while not having a strong direct impact on business results, have a strong indirect impact through how they help create the HR department characteristics and business capabilities that do have strong direct effects on results. We have characterized this consistent finding as “individuals can be champions; but teams win championships”. While an individual HR professional may be highly competent, the team of HR professionals in a department focused on building the right business capabilities will likely have greater impact on business results.
For media enquiries, please contact:
Julie McNamara
Media Specialist, Mahlab
[email protected]
0419 595 688
