Human Capital As an Asset: An Accounting Framework to Reset the Value of Talent | Willis Towers Watson | WEF

Talent Management

As organizations continue to reset for the new world of work, this 36-page report by Willis Towers Watson and the World Economic Forum provides seven principles for doing so. These principles form a “new human capital accounting framework that enables a company’s board and management to track how their investment in people is augmenting the firm’s human capital and support the delivery of better outcomes for the business, the workforce, and the wider community.” Figure 1 (p.13) shows the seven principles, including #3:  move FROM: Stand-alone – where companies take an inward, stand-alone and self-sustaining view of business and human capital strategy TO: Ecosystem – where organizations work with the communities in which they operate, partners, suppliers, ancillary industries and at times even competitors for talent. For example, when McDonald’s faced the possibility of having to cut jobs due to potential restaurant closures, it signed an agreement with Aldi Germany (a grocery chain facing a talent shortage) to redeploy McDonald’s workers on a voluntary basis to Aldi stores. McDonald’s avoided lay-offs, enabling it to preserve its human capital, and Aldi was able to satisfy its customers due to this mutually beneficial partnership. The report has other company examples related to the seven principles and concludes with recommended actions for policy-makers, CHROs, and boards.

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