Letters

This week's letters

Profit/enterprise ratios would flag up innovation

Innovative solutions are required to tackle issues raised by the article 'HR held back by inability to measure human capital' (News, 24 September).

One option might be to develop profit/enterprise ratios (P/E). These would show the proportion of profits derived from new ideas and processes. This directly relates to the input of individual employees and therefore indicates the efficacy of recruitment, training and reward strategies in boosting the bottom line.

While not an exact science, a first shot at arriving at a P/E might be to allocate profit made over a set period to different generations of product innovations and ideas.

Each £1m of continuing profit could be divided between products or services in place for more than 10 years, 5 to 10 years, 3 to 5 years, and less than 3 years.

The idea is to favour profit derived from recent innovations and discount cash cows. Profits from business processes in existence for more than 10 years are divided in half, while profits from newer innovations are multiplied. Profits derived from processes in place between 5 and 10 years remain neutral. These figures are totalled and set in ratio to the total profit.

While all business leaders recognise the importance of promoting innovation, few have been as quick to realise the importance of HR strategy. It is up to us to demonstrate the connection.

Prof. Alec Reed, CBE
Chairman, Reed Executive

Move is wake up call for the UK

Instead of being so willing to transfer call centre jobs to the other side of the world, perhaps we would be better off concentrating upon improving the lot of our existing UK employees (Analysis, 17 September).

The article claims that 'training and motivation is better in India', yet these are issues which can be influenced through better training, increased involvement and setting high service standards in the UK.

UK call centres are not all the same - in our centre we deliver eight weeks training for all new starts and have made improvements that have led to dramatic reductions in absence and turnover figures. It is all about better people management and creating an environment where people want to work.

Let us not forget this is not just about cost, it is about delivering service to the customer. We should not