IIP chief to lead quest for people measures

A working group tasked with developing a generic set of employee measures for company reports will be set up in the coming weeks, Personnel Today has learned.

The group, spearheaded by Investors in People (IIP), will consist of accountants, chief executives and leading HR professionals.

In 2003, the government’s Accounting for People Taskforce – which sat for 10 months at a cost of £277,000 – decided it wasn’t possible to create a generic set of human capital measurements.

As a result, the Operating and Financial Review regulations, which compel listed companies to provide a forward-looking statement on their business, only contained a passing reference to employee matters, sidelining HR as a strategic function.

Ruth Spellman, IIP chief executive, refuted claims from taskforce chair Denise Kingsmill that one set of metrics to measure human capital would not work.

“I don’t share her view. I think it is possible,” she told Personnel Today. “My brain tells me it has got to be possible to come up with some metrics. How do you measure the value of your other assets? You use a rule of thumb, donÕt you? It’s an accountancy convention that is used to measure hundreds of other things.”

Nick Starritt, managing director, Europe, at occupational psychologists Sirota, said measuring human capital would eventually become widespread.

“What HR is going through now with the development of human capital metrics is similar to what the accounting function went through 80 years ago,” he said. “This is a tiny first step in the evolution of the definition of HR statistics and data that will eventually resemble the rigour and depth of the accounting data that we have today.”

Spellman admitted the metrics would need different options for different types of industry, but insisted it would be possible to develop common measures.

Duncan Brown, assistant director general at the Chartered Institute of Personnel and Development, agreed that measures would have to vary by sector.

“But having different ratios doesn’t preclude any measures at all,” he said.

Spellman warned that HR would not be leading the drive to develop the standards as the focus would be on meeting the needs of CEOs and investors.

“I don’t see it being successful if it is just led by HR,” she said. “We need to ask why a chief executive would want to know this information and what worth is it to the business?”

Enlightened Europe leads the way on strategic role for HR

HR directors in the UK are lagging behind their European counterparts when it comes to strategic influence, according to new research.

A report by the Cranfield Management School reveals that less than half of the 1,115 UK organisations questioned have the head of HR on their board. This is a significantly lower proportion than in France and Sweden and slightly lower than in Germany. And only half of UK organisations involve the HR department in the development of strategy from the outset, the research reveals.

One UK-based HR director believes the profession has to ignore the concept of Òemployee championÓ if it is ever to become truly strategic.

In a letter to Personnel Today, Ian Foster, strategic HR adviser at Hampshire County Council, said: “That so many HR people are still trapped in outdated notions of being an ’employee champion’ is indicative of both how naive and damaging to our collective professional credibility these misconceptions are.

“We will never get out of our whingeing inability to become ‘players’ in business while we pretend that our role is about being nice to people.”

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