EUROPE - Watson Wyatt is preparing its second European Human Capital Index this spring and is inviting leading organisations in the UK and across the rest of Europe to participate in the study.
Two years ago the first European Human Capital Index showed there was a direct statistical correlation between companies' shareholder value and the quality of their human resources (HR) practices. It found that a significant improvement in key HR practices could be associated with an increase of 26% in a company's market value.
The 2002 study - the results of which will become available in October this year - will again look to reveal which HR drivers can be correlated most strongly with improved shareholder value. However, with the economy now in a very difficult shape, Watson Wyatt expects the relative importance of different HR practices to have changed since the middle of 2000.
The Human Capital Index is a dynamic study and diagnostic tool, said Steven Dicker, a partner at Watson Wyatt. Those HR practices that appear to be important for creating shareholder value during one part of the business cycle may become less important - perhaps even negative factors - at other times.
“For example, does the slowdown in the economy mean that recruiting excellence is no longer as important as it once was? Will the problem of unfocused retention of employees be an even more important factor this time around? Will HR professionals' instincts on these issues be backed up by the HCI? The timing of this second HCI study in Europe may throw up some fascinating results.
This year's study will take a closer look at the impact of HR technology (eHR), an area that has grown significantly in the past two years.
Organisations that would like to take part in this year's European Human Capital Index study should contact David Lucas (01737 274148; [email protected]).
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