How do FTSE 100 companies report on their “most important asset”?

Makbool Javaid, partner – Simons Muirhead & Burton

March 15, 2022

A new report of the ICPD states that while people are an organization’s greatest asset, workforce data should clearly and consistently show the risks and opportunities associated with people.

However, according to an analysis of annual reports, the quality of labor reporting in the FTSE 100 remains insufficient. For example, only a third (33%) reported recruitment data, only 6% reported the cost of hiring casual workers, and just nine companies reported their ethnic pay gap.

A company’s workforce is critical to its long-term success. The provision of safe, secure, fulfilling and fairly remunerated work should therefore be a priority for companies. Clear and relevant reports on labor issues are in the interest of companies; this information is valued by investors, who recognize human issues as a key part of corporate strategy and view poor employment practices as a business risk. Disclosure of workforce data in company annual reports is also essential to enable stakeholders such as workers, unions, customers, policy makers and civil society organizations to hold companies accountable. accountable for their employment practices.

To improve workforce reporting practices, organizations should:

  • report equally on workers under all types of contracts, rather than just direct employees, to ensure that contingent workers are included
  • build on the success of gender pay reporting and introduce mandatory ethnic pay reporting to help tackle racial inequality and discrimination in the workplace
  • invest in information systems that enable HR to collect the right information, in the right way, at the right time, to facilitate effective disclosure
  • provide data analytics training and development for HR professionals to ensure they can interpret and act on what the data shows
  • ensure that workforce engagement mechanisms are designed to give employees a voice, rather than being a one-way form of communication
  • ask HR managers to facilitate discussions with internal and external stakeholders about information they would find useful, whether for decision-making and/or reporting purposes.

Michael J. Birnbaum