“People are the greatest asset for our organisation” – how often do we hear business leaders say that? But does the reality of the employee experience match the rhetoric, and do we even have the information to make that judgement?
There is much truth in the adage, ‘what gets measured gets done’, yet when it comes to understanding what is happening with the people – or ‘human capital’ – in an organisation, we are still in the early stages of working out how to measure it.
Annual employee engagement surveys can provide a useful snapshot for management to flag areas of best practice or in need of improvement, but on their own can’t paint a true picture of competitive advantage or risk to the business. Understanding how the organisation is addressing people issues, from learning and development to improving diversity, is important. Risk management is another key area, from succession planning to the loss of talent, as well as wider issues like human rights within the supply chain. The gap between policy and practice needs to be considered – a brilliant policy is only as good as how it is implemented by line managers.
These complex issues can’t be reduced to numbers, but narrative reporting allows for a nuanced view, if it is done well. For investors and stakeholders looking to assess organisations, consistency is important. Company reports are not snazzy marketing brochures and an approach of cherry-picking the best metrics to include is at best unhelpful and at worst dishonest. More transparency on people reporting measures will be most successful if companies work together with investors and interested parties to find the best approach.
The Valuing Your Talent initiative was launched in 2014 to do just that, bringing together the expertise of the Chartered Institute of Personnel Development (CIPD), theChartered Management Institute (CMI), the Chartered Institute for Management Accountants (CIMA), Investors in People (IIP) and the UK Commission for Employment and Skills (UKCES). The aim is to develop a broad framework for human capital reporting, and encourage companies to disclose more information. Last week the Valuing Your Talent annual report showed it is having some success.
The Government has already regulated for reporting of some people measures – from action to tackle modern slavery in supply chains to the gender pay gap. This type of reporting may be in its infancy, but with human capital such a key driver of business success, it will increasingly be an important element of company reports. Further regulation on these lines is certainly possible, mixed with agreed minimum standards developed by business, and greater voluntary disclosure by some firms on particular issues. Smart business leaders will get ahead of the curve now - have a look at the Valuing Your Talent interactive framework to find out more.