Tensie Whelan and Ulrich Atz published a piece in Fortune on the inextricable relationship between human capital and the bottom line. The piece uses recent research and examples to argue that current reporting metrics are insufficient to understanding the financial impact of investing in employees and the significant costs of not doing so. More complete data and accounting will enable better decision-making and drive better returns to shareholders.

 

The piece cites Amazon's regretted attrition rate costing the business an estimated $8 billion, and high turnover within Domino's franchise system costing up to $3 billion annually.

 

"As a fundamental principle, we should invest in retention as much or more than recruitment. Robust training, supportive managers, fair wages and benefits, work-life balance, corporate purpose, and equity should be prioritized. Taking a more holistic approach to assess the returns on employee investments and educating investors and other stakeholders about the benefits of better human capital management for a company’s financial returns will be critical."

 

Read the full article here.