The Chartered Management Institute is launching a major research on human capital, with the Human Capital Forum as a partner.

The research forms part of an ambitious ‘Manifesto for a Better Managed Britain’, launched in November by the institute.

Petra Wilton, Director for Policy & Research at the institute, told a meeting of the Human Capital Forum shortly before Christmas: ‘The evidence shows over time how if you get management and leadership aligned to the business objectives you do have superior performance.’

But there remains very little information on human capital available for investors and other interested parties. Well managed companies may have impressive historic results, but there is little in the way of indicators available for future performance. ‘If you look through the annual report there are financial metrics, but how do you really tell that they are committed to developing their people?’

She said that most directors, when asked by the institute whether effective measurement of human capital management can improve performance, most said that it would, citing a range of improvements:
̶ Long term prosperity (70%),
̶ Employee commitment (67%),
̶ Corporate compliance (61%).

Some respondents said it would have ‘no impact – its another fad’, but the proportion giving this response was only 19%.

‘There is growing investor interest, as up to 80% of a company’s worth can be tied up in human capital,’ said Ms Wilton. She gave the example of Paris-based securities company Oddo, which identifies a range of human capital indicators, such as ‘pulling power’ and recruitment; governance and HR; and motivation.

Richard Bishop-Laggett, HR Services & Development director at facilities management company ISS, which was hosting the event, said that ISS had introduced more human capital indicators to improve performance, but additionally in response to request from investment bank Goldman Sachs.

The Human Capital Forum will assist in publicising the Chartered Management Institute’s research programme, and in finding partners.
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