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How HR measures its success in Southeast Asia

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For years, HR has been talking about becoming a strategic partner, but is it enough to calculate employee turnover as the main component of it’s value-addition strategy?

According to a new study by Michael Page, to determine the success of the HR department, the main KPI used in Southeast Asia (Indonesia, Malaysia, Singapore and Thailand) is staff turnover (78%), followed by employee engagement scores (72%).

Employee performance, ranked third at 71% in the region, is the number one indicator used globally, by 72% of organisations.

Other indicators used in Southeast Asia included measuring recruitment efficiency, employee competencies, and managerial performance, with organisations in the region more likely to track recruitment efficiency as compared to their global counterparts (54% vs 43%).

Employee mobility was the indicator used least to measure HR’s success, in both Southeast Asia and globally (9% and 16% respectively).

The report also notes that while KPIs are being measured, “HR performance measurement reviewing still seems to be in its infancy”, with 64% of organisations tracking three or fewer HR KPIs.

Interestingly, there was a correlation between the size of the organisation and the amount of effort invested into reviewing the efficiency of the HR team.

Organisations with a larger HR team size were found to be more likely to track more than 3 HR KPIs (52% in organisations with more than 100 HR staff vs 31% in organisations with up to nine HR staff).

ALSO READ: HR doesn’t (always) need to be at the table

Despite this, senior HR leaders in Southeast Asia are getting closer to the boardroom, as almost half (45%) directly report to the highest levels of management (CEO, CFO etc.).

Anthony Thompson, regional MD, Michael Page Greater China and South East Asia noted: “South East Asia’s HR leaders have been found to be below the global average for the percentage reporting into the highest levels of management, but they seem to be slightly ahead of the curve when it comes to the scope of their responsibilities.”

The report also found what India, Southeast Asia, and Turkey have in common – half of the organisations in these locations rate talent management among their top three HR priorities for the next 12 months.

In Southeast Asia, talent acquisition and succession planning followed, as the other two most pressing HR priorities, as stated by about one in every three HR leader.

Nearly half (45%) of HR leaders in Southeast Asia expect their workforce to expand over the next 12 months, while more than a quarter (27%) have increased their recruitment budget.

ALSO READ: HR needs to step outside of its comfort zone

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