This report by the Chartered Institute of Personnel and Development sets out a framework for measuring people management and development. The framework has been designed to suggest how companies should go about measuring their human capital and communicating the value of their people in their annual report and accounts. It is, however, equally valid for public sector and not for profit organizations. The OECD defines human capital as “the knowledge that individuals acquire during their life and use to produce goods services or ideas in market or non-market circumstances.” It is estimated that up to 75 per cent of the value of an organization is rooted in intangible assets, including people and their contribution.The CIPD’s framework is based on the provision of five categories of information: human capital strategy, learning and development, acquisition and retention, management and performance. It is designed to outline the contribution that an organisation’s people are expected to make in relation to the opportunities and challenges it faces, as well as HR’s role within that
Primary indicators include information that many organizations are already tracking including the average length of time to fill vacancies, number and cost of off-the-job training days, expenditure on workplace learning and staff turnover. Secondary indicators include information such as recruitment costs, composition of workforce including age, gender and race and number of employees who attain formal qualifications.
Published by The Chartered Institute of Personnel and Development.