I have long believed that it should be compulsory for organisations to publish certain key human capital metrics in their annual reports in just the same way as they have to report financial information. I see so many organisations wasting the potential to be far greater than they are - in terms of excellence of product, growth and sustainability - because any serious expenditure on the development of leadership and people management capability is seen as a cost rather than an essential investment that will reap huge benefits over time.
This bottom line thinking leads to fundamentally unhealthy and unsustainable organisations, the kind of organisation that one day becomes easy prey for takeover by bigger players. If companies are forced to measure and publicise a number of essential metrics such as their employee engagement index, it won't be long before shareholders and other stakeholders start seeing the links between that information and long-term productivity, profitability and growth. Organisations will then be shamed into investing properly to bring those metrics up to scratch.
This would deliver great benefits across all sectors. For example, enforced publication of annual sickness rates would soon begin to show a story in relation to those hospital trusts that are haemorrhaging money and delivering poor patient outcomes and those that are excellent. This should then lead to earlier intervention to assess the true root of problems, and more sophisticated solutions to prevent waste of money and unnecessary patient deaths.
As far as the not-for-profit sector is concerned, I for one would not give money to any charity that has a sickness rate above a certain level, and as a potential donor I feel I have a right to this information being publicly available.
Naysayers against this initiative point to the fact that the US project to create standards and common metrics has received a lukewarm response due to worries about metrics putting an increased and unnecessary bureaucratic burden on companies. This is exactly the kind of short-term thinking that leads companies to under-invest in anything to do with getting the best out of people. Nobody says it is an unnecessary bureaucratic burden to account to the nearest penny for profit, loss, cashflow and assets, so why should it be so in terms of measuring the health of organisations in terms of their human capital?
The trouble with initiatives such as this is that typically among those selected for involvement there are a number of loud voices who make it all much more complicated than it needs to be. This is almost certainly what has scuppered previous attempts to take human capital reporting forward.
My advice to the CIPD is that this initiative must not be left to a group of professional bodies, academics and consultants alone to come up with the recommendations. Fully involve, at every stage of the project, senior HR practitioners from the private, public and not-for-profit sectors and some enlightened CEOs too. That way we'll get something common sense, practical and meaningful that can be publicised in easy to understand terms and implemented without a lot of fuss and problem-stating.
Helen Giles is HR director of Broadway Homelessness and Support and managing director of Broadway's Real People, a social enterprise HR consultancy. Follow her on Twitter: @HelenMJGiles