HR gets credit for market value

By David Brown
|Canadian HR Reporter|Last Updated: 06/17/2002

HR can generate wealth for shareholders, but its contributions are greatest when human capital practices are aligned with the company’s market orientation, according to new research.

Many factors contribute to the difference in market value between two companies, but the study conducted by Andersen consulting attempted to determine how much of the difference could be attributed to HR. The answer? Almost half.

“We learned that human capital practices explain as much as 43 per cent of the difference in the market-to-book value of one company compared to another,” states the report