HR services today are constantly challenged to fuel a dynamic global workforce while minimizing costs. A recent study however shows trimming the budget on talent management may be holding some companies back.

The Boston Consulting Group and World Federation of People Management Associations compiled a financial report, "From Capability to Profitability: Realizing the Value of People Management," to determine the economic impact of effective HR administration

The study surveyed 4,288 individuals in 103 countries across diverse industries and identified 22 key HR topics that consistently correlated to a better economic performance. The three most important topics were leadership development, talent management and performance management and rewards. The study found organizations that excelled at recruiting experienced a revenue growth three times that of companies that did not. In addition, the companies that had these capabilities also had a profit margin two times larger than the underachievers'. 

Companies that establish leadership models that guide talent selection and promotion decisions tend to do better. Performance management is often tied to company business strategy, which allows promotions based on individual performance and people-development activities.

While high-performing and lower-revenue companies both strive to develop international talent, effective retention sets the bigger earners apart. They understand the need for development programs, career advancement opportunities and accommodating a worker's need for relocation.

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