The HR community says it is sorely disappointed with the government’s decision to scrap the Operating and Financial Review (OFR) regulations, fearing the move could relegate people issues to the bottom of the boardroom agenda.
OFRs required listed companies to include data in their end-of-year accounts on issues that affect business performance – including information on staff.
This presented a huge chance for meaningful people data to be included in financial results. Considering that people are fundamental to the long-term performance of an organisation, it makes absolute sense to define their value. It also seemed the chance for HR to prove to bosses and shareholders that people really are an asset, not just a cost.
The Chartered Institute of Personnel and Development reports that the introduction of OFRs prompted many companies to query what type of people information they should include in their end-of-year reports. It seemed that people issues were getting the priority they deserved.
So it is easy to understand why the government’s approach to this piece of legislation has been slammed as ‘cavalier’ and ‘ill-thought through’. But is it really the bitter blow that HR perceives it to be? Yes, it will probably slow down the people reporting process, but does it have to grind to an absolute halt?
Now that compliance is no longer an issue, does that mean that all HR departments should stop worrying about how to put a value on their people?
Surely, the whole point of including information on people management was to enhance a company’s reputation as an employer of choice. Why should that stop just because the law will no longer enforce it?
Best practice employers should and would do it anyway. Shareholders still need the information and, if a company is managing its people well, why shouldn’t it showcase this strength? Whether the government thinks this is necessary or not should be irrelevant.