Human Capital Management - The Task Force Recommendations

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In the past it had been suggested that companies should 'account' for their human assets by historic cost (the original cost of their recruitment and hiring), replacement cost (the projected cost of replacing them by a person with the same level of skill and experience) or by using discounted cash flows. Such suggestions have not been taken up mainly due to the deficiencies each has - the figures by themselves are hardly meaningful, let alone the problems (and cost) created in calculating such figures. It seems likely, even if the exact means cannot be currently defined, that there will be some requirement in the near future to try and assess the monetary value of these 'most valuable assets'. With such evidence the perception of employees as an increasingly valuable and valued part of the asset equation can only be strengthened. In addition, if such costs are known, it may well result in even greater efforts being made to retain good employees and help minimise the costs of their replacement.

However, the Task Force suggested that companies should provide detailed information on:

  • the size and profile of the workforce;

  • training and development;

  • remuneration;

  • career opportunities; and

  • fair employment practices.

    As an example we can (with appreciation of a company's permission to reproduce their report) demonstrate how these recommendations could be implemented in practice by quoting from the Cadbury Schweppes plc annual report 2003. (Chairman of Cadbury Schweppes, John Sunderland, was a member of the UK Task Force.)

    Some Key Facts and Figures
  • We employ around 55,000 people in over 60 countries around the world. Over the next four years, as part of our Fuel for Growth initiative we shall be reducing our workforce by 10% through a carefully managed and consultative process.

  • We have 180 people around the world in our executive management team.

  • Currently women constitute 34% of our global workforce, 25% of our managers and 11% of our executive management team.

  • Global staff turnover is generally low: 2%–5% per annum.

  • In the UK we are recognised as an Investor in People, the national standard of good practice for managing and developing people to achieve business goals.

  • We are regularly among the top 10 in the UK's 'Management Today's Most Admired Companies' report.

    (The report which occupies two full pages in the Company's Annual Report goes on to give fuller details of their approach under headings including:

  • Our people create and deliver our strategy

  • Capitalising on the diversity of our people

  • Reinforcing our reputation as an employer

  • Driving performance

  • Realising potential

  • Communicating openly and positively

  • Contributing to local communities.)

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