Face value
SSE and PwC boffins measure value of human capitalIs it possible to measure the value of a person? Although that question has haunted many of history’s finest minds, the energy company SSE recently commissioned PwC to solve it once and for all.
Their answer? About £173,000.
Not bad, although if you could do without every single one of your organs, you’d be worth a cool £375,000. Not sure if you’d be able to enjoy that cash, but hey.
PwC came to their assessment of the value of SSE’s human capital by estimating the expected earnings of an employee at SSE and the worth of their skills/qualifications. It’s thought to be the first a time a UK company has produced such a report.
John Stewart, SSE’s HRD, had this to say about the findings:
This report shows in black and white how both a company and society benefits from proper investment in its workforce through increased earnings for individuals and resulting increased tax payments. SSE is breaking new ground with this report which helps us properly understand the economic return on investment and shape our future HR plans and our investment in training.
The real motivation behind the report was not to help balance some books, but to justify the investment into training and development of employees. For every £1 spent on apprentices, there was a four to sevenfold return on investment.
With solid proof of the monetary soundness of spending on the development of employees, it makes it easier to make clear decisions on the matter. As they echo back and forth to one another in management circles — “You can’t manage what you don’t measure.”
HR should be happy to see SSE taking the time to acknowledge the value of human capital, long a vague outlier in the assessment of a company’s worth. If there is one clear way to prove the value of HR to a business, it’s valuing the actual human resources.
You can read the interesting report over here.
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