A new cross-industry project has been launched to help businesses measure the value of their workforce.
The UK Commission for Employment and Skills (UKCES) and Investors in People (IIP) have joined forces with the Chartered Institute of Personnel and Development (CIPD), the professional body for HR and people development, to lead a major collaboration with the Chartered Institute of Management Accountants (CIMA), the Chartered Management Institute (CMI), Lancaster University Management School and the Royal Society for the Arts (RSA) to help businesses measure the effect of their people on organisational performance and better equip them to improve workforce skills and productivity.
As our economy has evolved towards knowledge/service industries our human capital has become one of our biggest assets. The knowledge and skills of workers in the UK was worth an estimated £17.12 trillion in 2010. This was more than two-and-a-half times the estimated value of UK’s tangible assets – such as buildings, vehicles, plant and machinery.
However, although human capital is widely recognised as a driver of growth the desire and capacity to measure the effect that investing in people has upon business performance is under-developed. At the business level this limited understanding can result in aspects of human capital, such as training and management, being marginalised and not aligned to business strategy.
Valuing your Talent is a project that will enable more employers to realise the potential of their workforce. It will engage with and work through businesses to encourage employers to invest more strategically in their people and measure the effect of this investment on their organisational performance. Valuing your Talent aims to create the practical tools and meaningful indicators business leaders, investors and stakeholders need to objectively assess the value of an organisation’s talent and people management practices.
The ultimate goal of Valuing your Talent is to develop an open human capital management framework for the measurement of human capital that will make good people management and HR practices more visible, and encourage businesses to invest more strategically in their workforces.
In keeping with the open sourced ethos of this initiative, the project team will be seeking views from a wide range of professional bodies, influencers and regulators and practitioners within HR, finance and management, as well as the investor community and regulators. They will be examining existing practices, revisiting prior initiatives and research, and engaging opinion widely through open collaboration and social media to get input from employer organisations of all sizes and across all sectors.
The Valuing Your Talent project supports UKCES’ objective of ensuring more employers invest in the skills of their people, by sharing best practice and establishing a set of indicators and tools that will help businesses value their talent. The project will seek to create a movement to change business behaviour, in which employers view investment in their staff, via skills and training, as a long term asset rather than a cost. The primary objectives are:
- To better understand how developing and managing people releases and drives value.
- To clearly define the basic metrics for valuing talent and to help aid agreement and consistency in how such measures are used.
- To develop a broad framework against which executives, employees, investors and others can assess how businesses of all kinds are developing their people and organisations to enable sustained and higher levels of performance.
Main insights and project milestones will be shared via a dedicated web hub, which has been launched today and already houses a wealth of valuable information on what we already know about human capital metrics.
A newly published research insight, written for the CIPD by Dr. Anthony Hesketh, Lancaster University Management School, explores why, after extensive academic research, consulting interventions and even a major government task force, agreement on how to quantify the value of our people still remains elusive. It also sets out the guiding principles for the working group’s research.
David Fairhurst, Chief People Officer, McDonald’s Europe and UKCES Commissioner, said:
The fact that attracting, developing, engaging and retaining talent is pivotal to the long-term success of an organisation has been acknowledged for many years. However, despite a number of high-profile attempts, an agreed framework for objectively assessing the value of an organisation’s talent and its people management practices has proven elusive.
Collaborating with the RSA will allow us to use innovative social media technologies to gain input from a breadth of stakeholder groups. We believe that that this approach gives us the greatest possible chance of creating the practical tools and meaningful indicators business leaders, investors, and stakeholders have been looking for. Whether these tools and indicators can be applied to every business in every sector, or require a degree of customisation to meet the needs of a specific organisation remains to be seen. However, by making these freely available we are certain that this project will ultimately make a significant contribution to spreading and promoting best practice.
For more information click Valuing Your Talent here.
Published: 1 February 2014