HR to step up measurement of ROI

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HR departments believe that they will need to become increasingly sophisticated in using employee engagement metrics to quantify the Return on Investment (ROI) of HR investment, according to a new survey.

Nearly a quarter of HR professionals at 1300 of the world's largest companies expect to implement new employee engagement measurement tools in the next three years, compared to just 4% of companies that have such systems at present, the Towers Perrin survey found.

When asked to predict the greatest obstacles to business success in the next three years, 90% reported employee morale issues and 92% workplace engagement challenges. This compares to 57% and 60% in Europe respectively.

Three-quarters of UK companies said that recruitment is going to be a challenge in the next three years - 60% of UK companies are experiencing a shrinking labour pool and increased competition for employees and 63% report a shortage of required skill sets in the UK labour market.

On a more positive note, 14% of companies expect salary costs to be an issue in the next three years, compared to 31% who report costs as a major challenge today. At the same time, 47% of companies say being seen as an employer of choice will be important in the next three years, compared to 29% today.

"HR will face growing internal pressure to deliver talented people while measuring and justifying the HR investment. This dual pressure will give HR Directors an unprecedented prominence within their company and give HR departments the opportunity to become real strategic partners to help the business deliver performance goals," said Jim Crawley, partner at Towers Perrin.

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