A new report has found a "striking" correlation between successful recruitment delivery, and employers' revenue and profit margin improvement.
The Boston Consulting Group report, based on a survey of 4,288 global HR managers, found companies that were "adept" at recruiting experienced 3.5 times the revenue growth on average, and twice the profit margin improvement of less capable companies.
The report said that to claim a direct casual link between good HR and good results would be "overreaching"; however "probing the relationship between HR practices and business performance is a worthwhile exercise if it sheds light on those activities that seem to be particularly beneficial".
Respondents to the survey were asked to self-rate their company's ability level in 22 different HR functions.
Of all of those functions, recruitment had by far the biggest impact on revenue growth, ahead of onboarding and retention (which improved growth by a multiple of 2.5), employer branding (2.4), and talent management (2.2).
A highly capable talent management function had the biggest impact on profitability, improving profit margins 2.1 times that of a company which ranked its function as low-performing.
This was closely followed by recruitment, which delivered twice the profit margin improvement.
The report warned that excellence in one critical HR area would not compensate for shortcomings in another.
"Having an attractive employer brand might help you nab the talent, but it's not enough to help you hold on to it," it said.
Get the balance right between external hires and internal movement
The report noted that a common feature of high-performing companies was that they didn't rely too heavily on external hires, as these sometimes led to "bidding contests that can diminish the quality of new hires, yield bad matches, increase turnover and raise expenses".
High performers were, however, 1.8 times as likely as low-performing companies to actively recruit international talent, as they recognised the importance of diverse talent pools, said the report.
"As companies' operations and customer bases become more globalised, local talent that understands local markets will give companies greater long-term competitive advantage," it said.
The full findings of the survey will be released next month.