From quarterly to generational

"The result of investing in the workforce to achieve business results often appears in the mid- to long-term. Therefore, a longer-term view will inform human capital policies such as: building versus buying talent; investing in employee upskilling and reskilling; and reinventing jobs based on technology augmentation and alternate ways of working. Approaching business strategies and associated investments from a multiyear or generational (i.e. 15-year) perspective will likely require different metrics and bases for assessing performance."

WTW and the World Economic Forum outlined seven guiding principles to shift how human capital is valued. Click through the slides to learn more about each.

From profits to purpose

"Performance measures should focus not only on the return to shareholders but also on how an organization achieves its ESG objectives. ... An important element of stakeholder capitalism and corporate purpose is a company's responsibility to its people, including contingent workers as well as salaried employees."

From corporate policy to social responsibility

"There will be a rethinking of how the employment contract intersects with the social contract and with enterprises as actors in the community. It will be important for companies to be able to rely on their workers to represent the business in this broader context and to value them accordingly."

From stand-alone to ecosystems

"Successful businesses in the future will thrive as participants in ecosystems, working with the communities in which they operate, partners, suppliers, ancillary industries and at times even competitors for talent. The recent pandemic has necessitated stronger partnerships and alliances between unrelated companies."

From employees & jobs to people, work and skills

"As companies look to achieve the optimal combination of inputs by humans (regardless of the nature of their relationship with the organization) and by machines, and embrace agile ways of working, the traditional one-to-one relationship between a degree matched to a person matched to a position is giving way to a many-to-many relationship with multiple micro bite-sized on-demand learning opportunities matched to multiple skills matched to multiple ways of getting work done (e.g. jobs, projects, assignments)."

From the workforce as an expense to the workforce as an asset

"All workforce development costs are required to be expensed when incurred, resulting in a direct hit to earnings with no recognition of the value provided. We propose reversing this situation by treating investment in human capital in the same way we do investment in natural resources, particularly oil. Similar to PV-10, an accounting method for estimating the value of a company's future oil and gas reserves, the investment in the workforce could be capitalized and recognized on the balance sheet."

From backward-looking financial measures to forward-looking, broader measures of value

"Metrics are often chosen based on availability of data. Headcount and employee turnover can be relatively straightforward to track and trend but are insufficient. What is needed is an approach attuned to specific principles such as fulfilling purpose, prioritizing upskilling requirements, investing in the workforce and optimizing corporate ecosystems."

From quarterly to generational

"The result of investing in the workforce to achieve business results often appears in the mid- to long-term. Therefore, a longer-term view will inform human capital policies such as: building versus buying talent; investing in employee upskilling and reskilling; and reinventing jobs based on technology augmentation and alternate ways of working. Approaching business strategies and associated investments from a multiyear or generational (i.e. 15-year) perspective will likely require different metrics and bases for assessing performance."