The practice of collecting, evaluating and reporting on human capitalmanagement (HCM) enables better business decision-making and deepensunderstanding of the link between human resources, business strategy andperformance, according to new research from the Chartered Institute ofPersonnel and Development (CIPD).
The research report, Human capital reporting: What information counts inthe City? consists of interviews with two sets of interviewees, onerepresenting the views of investors and the other providing insights into companies' perceptions of what information investors are most interested infrom human capital measurement.
It examines the appetite of the investment community for HCM reporting andinvestigates whether, following the financial crisis, levels of interesthave changed since the completion of a similar piece of CIPD researchpublished back in 2007. It highlights a continued gap between the datacurrently available and the actual demand for specific types of data whichinvestors and other stakeholders require when making business decisions. Italso asks questions around the importance of HCM to overall businessperformance from both investors and organisations.
Angela Baron, CIPD Adviser OD and Engagement, says: "Our research has shownthat investors want comparable data, related to organisational keyperformance indicators and HR is perfectly placed to provide this type oftailor-made, quality data. However, there are issues around the capabilityof current HR data to provide the type of information stakeholders requireand practitioners need to develop appropriate measurement frameworks, apoint highlighted in the views from investors.
"We are in a unique position at the CIPD to help employers to improve howthey use and report on people management and human capital information. Ourresearch has shown that it is important for organisations and investors tounderstand the people drivers of sustainable success. This focus onsustainable performance is also the main focus of our major CIPD researchprogramme, Shaping the Future."
The findings from this research were discussed in a recent roundtable ofsenior HR practitioners and investors and have been summarised in aresearch insight, View from the City: How can human capital reportinginform investment decisions? which accompanies this report.