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Latest News

Human Capital Index launched in Europe

by Personnel Today 13 Nov 2000
by Personnel Today 13 Nov 2000

A tool designed to put a value on human resources within an organisation received its European launch last month.

The Human Capital Index, introduced in North America last year, was designed by global HR consultancy Watson Wyatt which hailed it as “a single, simple set of measures that quantifies exactly which human resource practices have the most effect on shareholder value”.

It is based on research showing that improvement to key ways of managing people can add up to 30 per cent to the bottom line, and could be the start of a transformation in the way firms are accounted.

The problem of intangibles has increasingly vexed accountants, as the growth of service economy means fixed assets are just a tiny proportion of a firm’s market capitalisation. The balance is largely made up of employee’s skills, knowledge and potential.

Insurance firm AXA welcomed the development. “To be able to quantify the value of the human capital in a business and link that to the bottom line explicitly is something that I think most HR managers are keen to be able to do,” said Dawn Bentley, head of HR operations at AXA. “It will help raise the importance of HR.”

www.hcindex.com

by Philip Whiteley

Personnel Today
Personnel Today

Personnel Today articles are written by an expert team of award-winning journalists who have been covering HR and L&D for many years. Some of our content is attributed to "Personnel Today" for a number of reasons, including: when numerous authors are associated with writing or editing a piece; or when the author is unknown (particularly for older articles).

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