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New
Report Calls for International Reporting Standards in Human
Resources Management
Human
Capital Management Demystified in New Croner report
Human
Resources has for too long taken a backseat to other business-critical
functions through having no industry-standard method of demonstrating
its return on investment. Now a defining new report "Human
Capital Management" launches for senior managers which
outlines the need for HR to drop the "tea and sympathy
image" and adopt a business focused agenda, aligning employee
and performance measurement with that of the strategic direction
of the business and "delivering tangible results, reliable
metrics and a visible return on investment".
Human
Capital Management - A Management Report from Croner, a leading
UK provider of employment information and advice, is written
by internationally renowned work and management expert, Richard
Donkin. Using a selection of case studies, Donkin demonstrates
how various businesses have sought to harness their individual
approaches to Human Capital Management. Moreover it points the
pathway to the boardroom that remains a significant status objective
of HR. The difference here, however, is that it describes tools
and strategies to help HR professionals define a leadership
role in business.
Research
over the last five years commissioned by Investors in People
UK
(IIPUK) shows that organisational changes made by recognised
employers
are twice as profitable as changes made by other companies.1.
In the words of the first chairman of IIP: "Investment
in people appreciates, whereas investment in capital depreciates."
At
the heart of Human Capital Management is the need for organisations
to align their own aspirations, beliefs and ambitions with those
of their stakeholders. Croner's new report explains why Human
Capital is a distinct and measurable business function, enabling
organisations to take a strategic approach to employment policies.
The
Report also gives details on new and forthcoming legislation
requiring large companies to include employee information in
their financial reporting, with a practical action plan of how
this can be used for corporate growth, illustrated with case
study examples from companies including Alexander Mann Solutions,
Sears Roebuck and Co, and Royal Bank of Scotland.
Richard
Donkin, author of Human Capital Management (HCM), says: "Quite
simply, Human Capital Management is about investing in people
and the intrinsic value of employees. This is not about 'family
friendly' HR policies. Even some of the UK's biggest companies
are failing to make the connection between investing in a workforce
and the end product in profits and sales. We are talking about
the relationship between investment and profit, hence the term
human capital."
He
continues, "Too often employees have been described disingenuously
as assets. This can send the wrong signal to accountants whose
balance sheet approach must register employees as costs. Employees
are quite clearly costs but if they are viewed as capital that
can appreciate with investment, rather than depreciate in value
over time like many fixed assets, their value to an enterprise
is difficult to dispute.
"This
report, using a selection of case studies, demonstrates how
various businesses have sought to harness their individual approaches
to Human Capital Management. Moreover it points the way to the
boardroom that remains a significant status objective of HR.
The difference here, however, is that it describes the tools
and the strategies that can help HR professionals to define
a leadership role in business. "Leadership has to be merited.
It cannot be assumed as some God-given right", says Donkin.
Human
Capital Management is the sixth in Croner's Business Evolution
series of Management Reports written by recognised industry
experts. Others in the series include Corporate Manslaughter,
Diversity and Equality and Corporate Social Responsibility.
Peter
Fitzmaurice, business development manager at Croner says: "Our
Management reports are accessible introductions to the hottest
issues in the marketplace and designed to demystify and clarify
strategic issues surrounding emerging management trends. Crucially
they provide the reader with rationale for business to buy into
the issues raised with clear pointers for preparing a proposal
for executive agenda setting."
For
further information about Human Capital Management or other
reports in Croner's Business Evolution series, please visit
www.croner.co.uk/managementreports.
1
Impact research recently commissioned by Investors in People
UK (IIPUK) shows that organisational changes made by recognised
employers are twice as profitable as changes made by other companies.
Additional productivity per employee was £41 per employee
per year in large organisations, £602 in medium organisations
and £303 in small organisations.
About
Croner
Croner is a leading provider of business information, advice
and support, publishing over 250 information packages in the
areas of compliance and best practice. Practical information
solutions are available in a range of formats to suit individual
business needs, from subscription-based loose-leaf manuals,
newsletters and magazines to software support packages, online
interactive products and telephone helplines manned by dedicated
professionals offering confidential expert advice.
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