There’s still no accounting for folk

“Accounting and people are not terms that usually sit easily with each other,” says Robin Roslender, Professor of Accounting & Finance at Dundee University, who has been working on the development of human capital reporting for many years.

The latest evolution of what used to be called personnel or human resources, human capital management (HCM), represents an important cross-over topic for finance professionals.

Never ones to miss (or fuel) a bandwagon, some of the world’s biggest business software vendors have been buying into the concept too, with SAP acquiring Success Factors, Salesforce buying Rypple and Oracle scooping both RightNow and Taleo into its portfolio.

For software companies, HCM represents an opportunity to mingle financial and people-related data to deliver up new numbers for performance management.

Which is where Roslender comes in. As senior academic adviser for a study commissioned by the UK Commission for Employment and Skills and a recent RAND report, he has been at the forefront of broadening management reporting on workforce issues. 

For example “presentee-ism”, where the sick come to work, but are unproductive requires monitoring and reporting as much as absenteeism, he suggests.

“Recent developments hint that through accounting for people, it may prove possible not only to improve the lives of many employees, but empower them to improved personal performances as well as benefiting broader society,” he argues.

Roslender admits disarmingly that “there is no definition” for human capital reporting, but continues: “People are a vitally important asset that is largely absent from current financial statements, except as a cost item. Management development and the success of the business has to be linked with operating and financial reporting.

“Accounting is simply telling the story of a business, so it relates to the work of employees.”

Ulitmately, he suggests, “People themselves should ltimately own the human accounting function as knowledge managers within corporate governance.

“The next step could even be self-accounting, if you could avoid the ranting,” he jokes.

Continued...

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Comments

hcm

david5541 | | Permalink

hcm is only effective where the organisation as high volume "HC" numbers

this never applies to the sme sector with less than 10 staff

With the all the invariables of a

justsotax | | Permalink

human being....i fear this sort of performance indicator will provide nothing but a very basic understanding of how the organisation is doing.