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People not 'greatest asset' for UK firms after all – report

British businesses are leaving their investors and boards in the dark when it comes to essential workforce data, according to a survey of senior decision-makers commissioned by The Chartered Institute of Management Accountants (CIMA) to coincide with a roundtable held by the Investment Association.  

The survey found that 42% fail to take human resources data into account when deciding business strategy. A quarter of firms with investors (22%) admit investor understanding of essential talent measures is bad or very bad.  

The research also highlights the importance of human capital metrics - measures which capture and evaluate a company’s investment in and management of its people - both to the business itself and to its external investors.

94% of those surveyed believe poor management of employees contributes to corporate failure. A sixth (14%) admit their return on investment on talent is poor or very poor.

No more than a quarter of companies report annually on investment in employees, such as staff salaries (25%)  and benefits (22%), training and development costs (23%), recruitment costs (15%) and employee satisfaction scores (25%). This is despite two fifths (41%) believing that it would be beneficial for external investors to be given more information about how the business invests in its employees.

Helena Morrissey CBE, chair of the Investment Association and CEO of Newton Investment, said: “A great many companies say that their talent is their greatest asset and they invest significantly in that talent. However, there isn't really a framework for reporting on the value of employees, making it difficult for all of us, including investors, to assess this vital aspect of a company's future prospects. The gap also means that companies are less motivated to 'finish the job' of developing a fully inclusive approach to talent.

"Bridging that gap is a job for both parties - companies can volunteer more information, but equally investors themselves need to be more dynamic, and should be asking for human capital data." 

Tony Manwaring, Executive Director of External Affairs at CIMA and programme director for cross industry research project Valuing Your Talent said: “Business leaders need to make use of the right data in order to take the best possible decisions to create value in the short, medium and long term. With more and more of the value of business being generated by intangibles, people measures are increasingly important. This is why it’s so striking that so few companies take human capital metrics into account. This is one of many reasons why CIMA is so committed to the Valuing your Talent programme.” 

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Damian Kerr
Press Officer, CIMA
T. +44 (0)7964 423608 
E. damian.kerr@cimaglobal.com