Greater workforce investment leads to better financial results: SAP study

• High-performers better at harnessing technology, HR a C-level issue
• Survey covered more than 2,700 executives and 2,700 employees

A GREATER emphasis on workforce development correlates with better financial results, according to findings from Workforce2020, a global study from SAP SE and Oxford Economics.
 
The study looked at high- and low-performing companies worldwide, including Australia, India, Japan and Malaysia in Asia Pacific, examining correlations between workforce priority and financial success, SAP said in a statement.
 
The results found several key characteristics of high-performing companies regarding their use of talent to drive bottom-line growth, the company added.
 
Recruit and keep the best talent
 
Higher-growth companies are better at attracting quality talent, according to the study.
 
SAP said that 64% of high-performing Asia Pacific firms are satisfied with the quality of job candidates, compared with 56% of firms with below-average profit margin.
 
In addition, one third of low-performing Asia Pacific companies say that difficulty recruiting employees with base-level skills is impacting their workforce strategies.
 
“Companies in Asia Pacific are undoubtedly growth-driven and Workforce2020 is a reminder that growth is tied to strong workforce development,” said Jairo Fernandez, senior vice president of Human Resources (HR) at SAP Asia Pacific Japan.
 
“Key to managing human resources well is finding, supporting and driving the right talent. Technology can help HR managers monitor and identify areas of opportunity to strengthen a company’s most valuable assets that ultimately lead to better business performance,” he added.
 
Plan for contingent workforce
 
High performers in Asia Pacific are significantly more likely to say that increasing contingent and consultant employees are impacting workforce strategy, while low performers tend to say changing demographics are impacting their strategies.
 
Almost half of higher-revenue companies in the region are increasingly using contingent employees, compared with only a third of low performers.
 
Prioritise workforce issues at the C-level

Top-performing organisations prioritise workforce issues at a far higher level than those that are lower-performing, according to the study.
 
As much as 77% of executives at high revenue growth companies in Asia Pacific say workforce issues are already driving strategy at the board level, versus 64% among underperformers.
 
However, more than a third of executives at high performing companies in the region said HR will have no voice in decision-making in three years.
 
Training and mentoring

Surprisingly, 40% of low performers say they have ample budget and resources dedicated to developing talent, compared with only 23% of high performers.
 
More low profit-margin companies in Asia Pacific also offer supplemental training (73% versus 56%), formal mentoring (69% versus 61%) and incentives for pursuing further education (40% versus 22%).
 
In terms of skill continuity, 35% of low performers say that when a person with key skills leaves, they tend to fill the role from within the organisation, against only 23% of high performers, who more often recruit externally.
 
Better prepared with technology skills
 
Executives at high-revenue growth companies in Asia Pacific say these technology skills are well-represented at their organisation, outperforming low growth firms: Analytics (62% versus 55%); office productivity software (58% versus 49%); and digital media (36% versus 27%).
 
For more information on the study and related best practices, check the APAC face sheet here (PDF) or visit the Growth campaign hub.
 
About the research
 
Oxford Economics, on behalf of SAP, surveyed more than 2,700 executives and 2,700 employees, and interviewed 28 executives across the following countries: Australia, Brazil, Canada, Chile, China, Colombia, the Czech Republic, Denmark, France, Germany, India, Japan, Kenya, Malaysia, Mexico, the Netherlands, Poland, Russia, Saudi Arabia, South Africa, Spain, Sweden, Switzerland, Turkey, the United Arab Emirates, the United Kingdom and the United States.
 
Survey respondents came from a variety of industries, company sizes and age groups (49% of employee respondents are millennials).
 
The study defines ‘high growth’ as companies that reported either above-average revenue or profit margin growth over the past three years. Of the 2,700 executives surveyed, 15% reported above-average revenue growth and 32% reported below-average revenue growth.
 
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