The new human capital equation

on responses from 555 senior executives from 68 countries, highlights sig-nificant management challenges that face the world’s corporate leaders. Two critical ones are: • Recruitment and retention of high-quality people across multiple ter-ritories, particularly as competition for top talent grows more intense; and relatedly, • Improving the appeal of the company culture and working environment. In fact, respondents in the 2006 EIU study, by 55 % to 45%, said that they expect to spend more on people than on technology in the next 3 years. That’s an important feature of the new human capital equation. There is no question that work-life initiatives can play a major role in meeting these challenges, as organizations strive to become employers of choice for the best and the brightest. In this presentation I will describe what leading firms are doing to become employers of choice, some new ways of measuring returns on investment in human capital, and some persuasive strategies for making the business case that work-life initiatives are solid investments. First, however, it is important to acknowledge the dismal state of human capital reporting. Accounting for People Unfortunately, the current state of financial reporting largely ignores human capital. Not only is it not on the balance sheets of public corporations, but as a 2-year study by Mercer Human Resource Consulting revealed, it is barely mentioned in annual reports. That analysis of the 100 largest publicly traded companies in the United States found that although firms spend approximately 36 % of their revenues on human capital, few tell their share-holders about how that money is spent. Only about 20 % discuss human capital and its contribution to business success in their annual reports. Roughly 25 % provide only limited references to the workforce, and others do not mention their people at all. The report also found that: • Of those companies that do report on human capital, the informatio