But CIPD report shows inconsistent measures undermine power of data
The long-term growth potential of organisations and of the economy is being hampered by inconsistent measurement and reporting of human capital information, a report from the CIPD has found.
Despite many organisations recognising the value of data on people performance and behaviours, companies’ “ad-hoc” approach to sharing their human capital management (HCM) strategies is contributing to long-standing problems of short-termism.
This in turn means vital people metrics is often lost or undervalued, as investors and stakeholders lose faith in the data provided and don’t ask for more, CIPD chief executive Peter Cheese said.
“Because the data isn’t being requested, firms don’t put a consistent effort into reporting people-based data; productivity challenges go unresolved and critically important intangible assets, such as the workforce, continue to play second fiddle to more tangible assets when investment decisions are made,” Cheese said.
The report - Human capital reporting: investing for sustainable growth- from the CIPD’s Valuing your Talent initiative is published in partnership with CIMA, UKCES, Investors in People and CIMA and was launched at an event in London today (Friday 23rd January).
Business secretary Vince Cable welcomed the findings and said that focusing on reporting standards around people-led performance could ensure business investment is maximised and productivity is improved year after year.
“I am determined to tackle the short-term investment culture that helped to cause the 2008 financial crash. That’s why I commissioned John Kay’s review of the equity markets, and why we’ve given priority to implementing his recommendations.
"We have comprehensively reformed reporting frameworks, enhancing the focus on long-term strategy and removing the requirement for mandatory quarterly reporting to encourage companies and investors to take the longer view.
"We have overhauled the governance of executive pay, empowering shareholders to ensure companies’ pay structures are genuinely linked to longer-term performance. We have supported the development of the Investor Forum to make collective engagement by investors more effective. And we have made good progress on boardroom diversity,” he said.
“I know that we now have laid the solid foundations to build a real shift away from the ‘quick buck’ culture that wrought such damage in the past. Today’s report is a very interesting contribution to the debate on where to go next,” he added.
The report – which looked at the value and availability of HCM across UK PLCs – suggests that people data was more likely to enable organisations to better understand and put a value on company performance in regard to potential downside risk.
This is vital to driving a longer-term approach to the delivery of business performance and productivity, Doug Baillie, chief HR officer for Unilever said at the launch event.
“By adopting human capital reporting we are increasing our accountability and presenting a more transparent and coherent picture to our stakeholders on the health of our business. Having an accurate picture can also lead to competitive advantage by unlocking the full potential of our people, making the case for its adoption a resounding one,” he said.
For more from the business secretary read ‘Cable pledges to investigate self-employed status’