How do companies report on their ‘most important asset’?
An analysis of workforce reporting in the FTSE 100 and how this can be improved to build more productive, responsible and sustainable businesses
An analysis of workforce reporting in the FTSE 100 and how this can be improved to build more productive, responsible and sustainable businesses
If people are an organisation’s greatest asset, then workforce data needs to clearly and consistently show the risks and opportunities associated with people.
However, according to an analysis of annual reports, the quality of workforce reporting in the FTSE 100 remains inadequate. For example, only one-third (33%) reported recruitment data, just 6% reported the cost of hiring contingent workers and a mere nine companies reported their ethnicity pay gap.
The research – conducted in partnership with the PLSA and Railpen – shows that, while there have been some improvements in disclosure, the quality of this reporting remains low in many cases, making it challenging for stakeholders such as investors to assess the working practices and culture of an organisation. We continue to see instances of poor employment practice, an overall decline in employer investment in workplace training and plateauing productivity. The current UK labour shortage also clearly illustrates why organisations need to focus on pay and conditions.
Workforce reporting is key to responsible business practice. Improved reporting, showing how organisations manage and develop their people, not only proves the value they place in their workforce but also provides crucial information on how effectively they are addressing other ESG issues.
We suggest that the Financial Reporting Council (FRC) works with other stakeholders – including investors, companies and people professionals – to establish a framework for workforce reporting that sets out a baseline of minimum standards. This would enable leaders and investors to make informed decisions that will help build more responsible, productive and sustainable businesses – and a fairer world of work.
In addition, this report makes recommendations for policy-makers, investors, boards and people professionals around how to establish better quality reporting practices, which are critical for building a people-centric business. These evidence-based insights will ultimately lead to better employment practices and business success.
While these findings and recommendations are based on the UK context, the broader implications should be of interest wherever you are based.
To improve workforce reporting practices, organisations should:
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