Duncan Brown, assistant director-general at the Chartered Institute of
Personnel and Development, explains why human capital management should top the
At the Amsterdam summit, I gave an overview on the Chartered Institute of
Personnel and Development’s (CIPD) extensive work on human capital. It is
certainly an area of growing interest, and it was the fourth such presentation
that I have made this year already.
The likely future requirement of UK companies to report on their human
capital in annual reports and accounts is – at last – galvanising more
concerted attention, and, hopefully, action.
The event largely consisted of illustrations of the application of Kaplan
and Norton’s original methodology, now detailed further in terms of its
application to the so-called ‘intangible assets’ – of which people are the most
Some may find this specific application a little over-engineered for their tastes,
although the case studies shed a lot of light on the broader process of
agreeing how to best leverage staff for competitive advantage, and how to
measure and achieve it.
The CIPD is currently drafting a free guide on how to go about human capital
reporting with a taskforce of industry experts. It aims to give a broader view
of the measurement process and how to go about it, and should be available by
But whatever methodology or approach you prefer, the taskforce members have
reinforced that the huge potential value that people can add to an organisation
can only be realised if you measure and manage that value effectively. HR
professionals need to play a leading role in doing this.
The message is: do it proactively yourself to add value to your people, your
business and your function, rather than waiting to have it imposed on you from