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CIPD and UKCES lead working group to help organisations make more strategic workforce investment

The CIPD, the professional body for HR and people development, has joined forces with the UK Commission for Employment and Skills (UKCES) to lead a major collaboration with the Chartered Institute of Management Accountants (CIMA), the Chartered Management Institute (CMI), Investors in People (IIP) and the Royal Society for the Arts (RSA) to help businesses measure the impact of their people on organisational performance and better equip them to improve workforce skills and productivity.

The ‘Valuing your Talent’ initiative is announced at a time when productivity is still below its pre-recession level and following the recent publication of an OECD Skills Survey which has shown the importance of improving the country’s skills base. It aims to create the practical tools and meaningful indicators business leaders, investors and stakeholders need to objectively assess the value of an organisation’s talent and people management practices.

The ultimate goal is to develop an open framework for the measurement of human capital that will make good people management and HR practices more visible, and encourage businesses to invest more strategically in their workforces. In keeping with the open sourced ethos of this initiative, the project team will be seeking views from a wide range of professional bodies, influencers and practitioners within HR, finance and management, as well as the investor community and regulators. They will be examining existing practices, revisiting prior initiatives and research, engaging opinion widely through open collaboration and social media to get input from employer organisations of all sizes and across all sectors, and ensuring both objectivity and academic rigour with the help of Dr. Anthony Hesketh, senior lecturer at Lancaster University Management School, who is leading the research on behalf of the project partners.  

The Valuing Your Talent project supports the UKCES’ objective of ensuring more employers invest in the skills of their people, by sharing best practice and establishing a set of indicators and tools that will help businesses value their talent. The project will seek to create a movement to change business behaviour, in which employers view investment in their staff, via skills and training, as a long term asset rather than a cost. The primary objectives are: 

1. To better understand how developing and managing people releases and drives value.
2. To clearly define the basic metrics for valuing talent and to promote agreement and consistency in how such measures are used.
3. To develop a broad framework against which executives, employees, investors and others can assess how businesses of all kinds are developing their people and organisations to enable sustained and higher levels of performance.

Key insights and project milestones will be shared via a dedicated web hub, which has been launched today and already houses a wealth of valuable information on what we already know about human capital metrics. A newly published research insight, written for the CIPD by Dr. Anthony Hesketh, explores why, after extensive academic research, consulting interventions and even a major government task force, agreement on how to quantify the value of our people still remains elusive. It also sets out the guiding principles for the working group’s research.

Peter Cheese, CIPD chief executive, comments:

“Skills shortfalls and youth unemployment, concerns about corporate cultures and leadership behaviours, building engagement and productivity, taking advantage of diversity to build more sustainable and innovative businesses - these are all now recognised as critical challenges that impact the long term success of businesses, the public sector and society more broadly. That’s why the need for more insight into the people management and development practices that can really make a difference is increasingly a shared agenda for finance, HR, business leaders, external stakeholders and even regulators.

“However, despite efforts in the past, we do not have agreed measures and metrics that provide visibility on all these issues or any consistent ways of reporting of them. We have long talked of the intangible value of businesses, of which human capital is a major part, and now there has never been a better time to agree a common approach and way to start to make the intangible more tangible. The Valuing your Talent initiative has a bold ambition to look at current best practices and research and agree a common, open and collective framework of measures working together with a broad constituency of HR, finance, and management bodies and engaging with a wide range of practitioners, researchers and influencers.”

David Fairhurst, Chief People Officer, McDonald’s Europe and UKCES Commissioner, said: “The fact that attracting, developing, engaging and retaining key talent is pivotal to the long-term success of an organisation has been acknowledged for many years. However, despite a number of high-profile attempts, an agreed framework for objectively assessing the value of an organisation’s talent and its people management practices has proven elusive.

“Collaborating with the RSA will allow us to utilise innovative social media technologies to gain input from a breadth of stakeholder groups. We believe that that this approach gives us the greatest possible chance of creating the practical tools and meaningful indicators business leaders, investors, and stakeholders have been looking for. Whether these tools and indicators can be applied to every business in every sector, or require a degree of customisation to meet the needs of a specific organisation remains to be seen. However, by making these freely available we are certain that this project will ultimately make a significant contribution to spreading and promoting best practice.”

Charles Tilley FCMA, CGMA, Chief Executive at CIMA, said: “CIMA has long advocated that more emphasis should be placed on measuring the value of non-financial assets, such as workforce skills, experience and motivation. Employees are the key stakeholders in any business, and absolutely vital to long-term, sustainable success. We are delighted to be involved in this valuable and exciting initiative.”

Ann Francke, Chief Executive at CMI, comments: “This exciting project will help us set out a common approach to measuring the impact that great management and leadership has on improving organisational performance. Our hope is that we can create a framework that will help organisations to measure, value and improve their people management – which will be a big benefit to individuals, organisations and the UK as a whole.” 

For more information, visit cipd.co.uk/valuingyourtalent