Valuing Your Talent: Why people are your most valuable asset

01 June 2016 -

With only 20% of a company’s value held on its balance sheet, Insights spoke to CIMA’s Charles Tilley and CIPD’s Peter Cheese to look at why it is important to measure the performance of your people, and how getting it right can boost your performance

Matt Scott

The way in which companies report on performance is changing, according to a new report from the Valuing Your Talent partnership, with the amount of information relating to the knowledge, skills and abilities of their staff increasing by 15% between 2013 and 2015.

Speaking at a launch event for the Valuing Your Talent report, CIMA chief executive Charles Tilley said that this corresponds to how businesses had evolved over the last 30 years.

“The value of business has moved from mainly sitting on the balance sheet to mainly not sitting on the balance sheet,” he said. “If you look today at the top 100 companies, you will find the balance sheet values of those companies is less than 20% of their overall value.

“That value now rests with the ability of people to deliver their services in the future.”

Tilley added that one company making strides in this area was Apple, which gets even the most junior sales staff interviewed by regional managers as part of their rigorous recruitment process.

“The reason for that is they want the very best people and they don’t expect people to leave,” he said. “That demonstrates how people are at the heart of everything.

”The challenge we have is it is quite easy to add up how much cash we have in a till, it is very difficult to really work out how motivated your staff are.”

More work needed

CIPD chief executive Peter Cheese said that despite the improvements being made, more needs to be done before human capital reporting is performing as it should.

“While organisations appear to be improving their corporate reporting on how people help to drive organisational performance, there’s still a long way to go before we have a consistent picture of how organisations are managing and developing their people,” he said. “With many more questions being raised about corporate cultures, diversity, engagement and wellbeing, as well as the changing nature of the workforce and how these impact productivity and risk, we need greater transparency and consistency of human capital reporting.

“We need more common definitions of key people and organisational metrics, and for businesses to better articulate how they are using these measures to provide consistent insight for all stakeholders. This is now vital in building trust, in understanding the real drivers of productivity, in understanding critical risks, and in helping to create better work and working environments for all.”

Tilley and Cheese were talking at a Valuing Your Talent launch event for a new report, Reporting Human Capital: Illustrating your company’s true value. Find out more about the research here