Valuing Your Talent: Short-term capitalism is damaging UK businesses
A focus on short-term financials rather than long-term human capital development is putting a dent in the future prospects of business in the UKMatt Scott
Businesses are putting too much focus on short-term financials when reporting on business performance according to panellists at a Valuing Your Talent event.
Instead, organisations should look at the long-term prospects of their business and how better management of people and better reporting of these issues can improve overall performance.
Speaking at the event, CIPD chief executive Peter Cheese said it was now time for businesses to change the way they report about the performance of their organisations.
“Employees, customers and suppliers are now all showing more and more interest in how an organisation develop and align its people,” he said. “There is truly a multi-stakeholder view of the world, but we haven’t always responded to those multi-stakeholders in the business and we have often been driven too much by short-term return and particular for the financial stakeholder.”
Research from the Valuing Your Talent partnership found that across the whole of the FTSE 100, 65% of companies have increased their reporting on knowledge, skills and abilities issues and 76% on human resource development.
But CMI chief executive Ann Francke said such human capital reporting needs to be embedded into the way a business is led if it is to make a real difference in the business world, not just reported on.
“This isn’t just about reporting, this is about embedding things into the management of a company,” she said. “That is what will make a difference. It needs to be about asking: how does this make a difference to my outcomes? That’s what the Valuing Your Talent Framework is all about.
“You are only going to generate those outcomes if you can embed it in your management behaviours. It needs to be something that every manager in the organisation needs to do from the C-suite, to middle managers to front line management.”
Former business secretary and keynote speaker at the event Vince Cable said this was essential for boosting British productivity.
“Recognising the importance of human capital as a key to enhancing productivity [is vital],” he said. “All the evidence we have shows that if you are trying to drive long-term growth there are two things that really matter. One of them is innovation: applying science in a practical context. The other is people.
“That is partly about skills, but also getting the most out of your labour force. Human capital as a key component of productivity is one of the strands we developed in my time in the government, and that remains absolutely essential.”