People are delivering variable return on investment

Evidence suggests that Western Europe and the UK need to look more closely at how human resources are managed. The differences are not due to revenue growth divergences but different economies’ ability to flex the level of employment costs to market conditions.

In Western Europe and the UK, despite high growth in revenues during the uninterrupted growth years of 2002 to 2006, the rise in human capital return on investment (HC ROI) was a mere 8.3% and 4.6% respectively. Over the same period US HC ROI increased by 19.8%. In 2007, we saw the first signs of decline in some economies and in 2008, with markets suffering; the index fell in both Western Europe (1.7%) and in the UK (2.8%) but was held steady in the US