Competency Usage Analysis

SuccessFactors Research has analyzed competency usage in various industries at an aggregate level. Our analysis has proven the hypothesis that the competencies you use to manage your workforce impact bottom-line results. This is not research for the sake of research, where we simply wanted to verify the hypothesis. We were more interested in finding which competencies that could be used within different verticals and in different circumstances.

Based on rigorous analysis of detailed data pooled to larger aggregations, we found patterns in the competencies that different groups of companies are using. We analyzed financial performance both in terms of growth where we looked at Top Line Growth 12 months and compared each individual company with their competition, as defined by Hoovers industry comparison data, as well as profit where we picked Return on Equity as the metric.

We analyzed this large set of data in the following verticals : Services, High Tech, Industrial Manufacturing and Retail.

For financial services, we found that there are three competencies that are clearly correlated with superior growth. As for any of these research findings you must not make the mistake of blindly applying these and hope for superior growth. This unique knowledge that is presented here must be filtered and put in context with your unique situation (internal and external), as well as your strategy and core values.

SuccessFactors Research offer this as a service through the Strategic Consulting group within our Research Department.

In terms of superior profit levels, we analyzed the same verticals and compared the different companies using Return on Equity as the measure. In Retail, for instance, we found that competencies that are tied to keeping a sustained workforce (i.e. increasing retention) are clearly correlated with superior profit levels. Increased retention is one of the key levers for improving profit in many industries, but it is especially true for Retailers with high turnover.

We took this analysis one step further to give us one more angle to look at: which competencies will maximize the effect of your workforce on business results. We wanted to understand what competencies correlate with superior financial performance over the maturity lifecycle of a business. We believed that there should be a difference depending on where you are in that lifecycle. In terms of financial performance, we created an un-weighted index of 12 months top-line growth, return on equity, and a valuation metric (price/book) to distinguish the companies that showed stronger financial performance from the companies that showed weaker financial performance.

In a company's growth phase for instance it is interesting to see which competencies are correlated with great financial performance. This pattern seems logical: Clear communication with strong leadership, combined with fast decision making based on business judgment in an entrepreneurial spirit.

If you are interested in leveraging this knowledge to your advantage, please contact our research department at research@successfactors.com.