Ravin JESUTHASAN, managing director at WILLIS TOWERS WATSON and co-author of the paper, said:
"COVID-19 has accelerated a shift to new ways of working, prompting companies to rethink how, where and by whom work gets done."
As companies look to reset their business models, they need an approach to valuing talent not as an expense but as an asset so that boards and management can be held accountable for their investment in people and for delivering better outcomes."
The paper, which draws on principles developed by WTW and the WEF in an earlier publication, outlines a human accounting framework that can help organizations measure and quantify the contribution of their people in the same way it measures returns on financial and intellectual capital. A company's intangible assets, including human capital, are now estimated to comprise on average 52% of its market value.
In addition to providing an update on how companies are incorporating human capital metrics into their financial and operational measures, the paper also considers how some of the dramatic impacts of the COVID-19 crisis on labor markets could have been mitigated if companies had valued their human capital better.
The framework outlines seven guiding principles to shift how organizations value people. These include shifts from profit to purpose; corporate policy to social responsibility; stand-alone entities to ecosystems; and employees and jobs to people, work and skills. The paper includes examples of companies that have put these principles into action - from upskilling their workforce to sharing workers to avoid layoffs.
Saadia ZAHIDI, managing director, World Economic Forum, said:
"As companies enter a new normal following the COVID shock, they must place talent at the heart of their business. (...) By fundamentally revaluing and investing in their workforces, organizations will be better able to do what is right for their business, their employees and societies."
The white paper is available to download for free here.