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Workforce development investment pays off, finds aerospace industry research

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A report by the Society of British Aerospace Companies has demonstrated that investing in workforce development brings benefits.

A High Performance Work Organisation (HPWO), as here defined, comprises complementary sets of practices in human resources and employee relations. There is a close relationship between HPWO and financial performance. Companies high on the HPWO index in 1999 recorded sales per employee in 2002 of £162,000, compared to £62,000 for those low on the index – a difference of 161%. In value-added per employee the corresponding figures were £68,000 and £42,000 – a difference of 62%.

Some HPWO practices have more impact than others. Giving people a stake in the business was particularly effective. Providing information for employees – through briefing groups, for example – was associated with higher levels of profit per employee, and employee turnover was lower where firms gave employees more responsibility for the quality of their own work.

"To succeed in this competitive world we need to create work environments in which people can excel and produce high quality goods and services to guarantee our future prosperity. Building a ‘High Performance Work Organisation’ is going to be critical for our continued success," said John Rivers, Chairman of SBAC’s People Management Board and Director of Human Resources at Rolls-Royce plc.

The proportion of aerospace establishments using high performance work practices increased between 1997 and 2002. However there is still a long way to go before the full range of practices is comprehensively adopted by the UK Aerospace Industry. Only 11% of establishments use two-thirds or more of all high performance work practices, and 45% use less than half. The gap is widening between those who adopt HPWO practices and those who don’t.

The report is entitled "High Performance Work Organisation in UK Aerospace – The SBAC Human Capital Audit 2002". It was funded by the DTI, and coordinated by the Society of British Aerospace Companies with research conducted by Templeton College, Oxford.

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