|No.51 July 1, 2002|
|Human Resource Development Systems Focusing on HR ROI|
The results obtained from a recent survey carried out by NRI (Nomura Research Institute, Ltd.) on listed companies also reflect this new trend. As only a few companies actually keep track of human resource development costs on an individual employee basis, a means to establish an effective standard for managing and assessing human resource development is required.
Spending on human resource development should not be considered simply as costs, but rather as investment. Taking investment efficiency into account and appropriately managing it should improve the effectiveness of human resource development. The concept of an "HR ROI" (human resource return on investment) as defined in the following equation is proposed as a standard for this purpose.
To improve the functional level of an organization over the long term, it is necessary to envision the employee career path based on the thrust of the company's management, and to create a training and development system that combines OJT (on-the-job training) with OffJT (off-the-job training).
The ultimate benefit of setting an HR ROI comes in the ability to rationally offer training and development opportunities to high-performance employees. For a company to ensure its competitiveness over the long term, it is critical to provide attractive business opportunities to those employees with a high market value so that they will voluntarily commit themselves for the long term. To implement this, it is necessary to take a long-term perspective in approaching human resource development and to focus on target-oriented human resource management systems per se.