By Claire West

The practice of collecting, evaluating and reporting on human capital management (HCM) enables better business decision-making and deepens understanding of the link between human resources, business strategy and performance, according to new research from the Chartered Institute of Personnel and Development (CIPD).

The research report, Human capital reporting: What information counts in the City? consists of interviews with two sets of interviewees, one representing the views of investors and the other providing insights into companies’ perceptions of what information investors are most interested in from human capital measurement.

It examines the appetite of the investment community for HCM reporting and investigates whether, following the financial crisis, levels of interest have changed since the completion of a similar piece of CIPD research published back in 2007. It highlights a continued gap between the data currently available and the actual demand for specific types of data which investors and other stakeholders require when making business decisions. It also asks questions around the importance of HCM to overall business performance from both investors and organisations.

Angela Baron, CIPD Adviser OD and Engagement, says: “Our research has shown that investors want comparable data, related to organisational key performance indicators and HR is perfectly placed to provide this type of tailor-made, quality data. However, there are issues around the capability of current HR data to provide the type of information stakeholders require and practitioners need to develop appropriate measurement frameworks, a point highlighted in the views from investors.

“We are in a unique position at the CIPD to help employers to improve how they use and report on people management and human capital information. Our research has shown that it is important for organisations and investors to understand the people drivers of sustainable success. This focus on sustainable performance is also the main focus of our major CIPD research programme, Shaping the Future.”

The Shaping Our Future report can be viewed here