HUMAN CAPITAL AS AN ASSET: Recommendations to support better PAGE 24 AN ACCOUNTING FRAMEWORK FOR THE NEW WORLD OF WORK decision-making A FRAMEWORK FOR HUMAN CAPITAL ACCOUNTING Operationalizing a principled approach metrics need to be relevant to and engage a wide range of internal and external stakeholders. Relevant metrics will inevitably involve qualitative as well as to workforce management requires quantitative elements, including quite mainstream measures of investment, profit organizations to think about human capital and employee engagement as well as more innovative sources, such as social media or email sentiment. measurement in a way that goes beyond — Frameworks. In order to organize metrics and bring their value to life, current mindsets and practices. Companies frameworks are needed that align metric choices with company purpose. Measurement frameworks provide an organizing principle that can join up are accustomed to selecting among metrics disparate measures, conceptually or even analytically. When done well, such a framework can tell an overarching narrative about human capital value and to understand the value of their people. promote a balanced view of performance. Measurement dashboards can be used to communicate that performance narrative. Regardless of the form, their intention is to appeal to and represent the input and influence of multiple This approach is healthy, but it is only a start. stakeholder groups – from human resources (HR) to operations and customer service, and even oversight boards and regulators. There are four important considerations for — Duration. In a world marked by generational time horizons, metrics also need expanding beyond current practices and to balance immediate feedback on results with long-term trends that reflect taking a more principled approach: progress towards an eventual goal. For instance, sales results and even email and social media sentiment can be regularly examined to signal immediate shifts in service performance. In contrast, pay equity measures or even rates of employee volunteering can be tracked to monitor progress towards longer-range goals of gender equality and positive community relations. — Purpose. Underlying all of these considerations is the ultimate purpose of the measurement process itself. Data points are of most value if their input to decision-making is readily apparent. Organizations can be particularly successful if they limit their focus to metrics for which they have action plans in place or for — The metrics themselves. Metrics are often chosen based on availability of which they intend to introduce such plans. In turn, it is easier to determine what data. Headcount and employee turnover can be relatively straightforward to those actions should be when the available data permits the analysis of root track and trend but are insufficient. What is needed is an approach attuned to causes of shifts over time. A best-practice model thus includes comprehensive specific principles such as fulfilling purpose, prioritizing upskilling requirements, measures that are fit for purpose, are tied to ongoing change initiatives and investing in the workforce and optimizing corporate ecosystems. In addition, enable smart analysis to direct improvement efforts.