High awareness of OFRs Human Capital reporting yet to translate into action as majority wait and see

Water for Fish, the people and organisation consulting company, today reveals that 89% of senior finance professionals and 84% of human resources (HR) professionals surveyed are aware of the new Operating Financial Review (OFR) requirements for UK quoted companies to report on their human capital. However, only 52% of finance respondents and 57% of HR respondents planned to include such information in their next OFRs.



The survey was conducted in March-April 2005 among 100 senior financial and HR professionals within UK quoted companies, their businesses as diverse as financial services, pharmaceuticals, electronics, construction, retail, airlines and recruitment...

Rob Davies, Managing Director of Water for Fish said: ëMany organisations appear to be putting this new DTI requirement (which started in April 2005) on the back burner, either because their year-end is some way off - or has just gone. Or simply they see other information as more critical to their business. Our experience is that organisations which collect and analyse high-quality people information enjoy real productivity and performance gains.í

WHOSE RESPONSIBILITY?
Whilst some 36% of financial professionals thought responsibility for the OFRís human capital reporting lay with them, a further 25% of financial people surveyed thought the responsibility lay with the HR Director. By sharp contrast, the majority (57%) of HR people surveyed thought the onus was on them.

The report shows that whilst the majority feel it important to include some information on their employees in their OFRs, there are varying degrees of readiness in covering the key human capital reporting areas to be addressed. Both financial and HR respondents agreed that they are most prepared and equipped to report on the workforceís size and composition, along with their approach to, and issues around, recruitment and selection.

However, they are least prepared and equipped to comment on leadership and succession planning processes, only slightly behind their ability to describe their motivation, reward and retention practices and processes and the implications of these. A range of reasons were given as to why people were not prepared nor equipped to implement the OFRís human capital reporting requirements.

WHAT FINANCE PEOPLE THINK
Some 6% of finance people are unaware the OFRís human capital reporting is a requirement; 5% think other things are more important and 3% will not be complying until it is mandatory...

ëWe donít think best practice is established yetÖ. we need more timeÖí. Financial Controller

ëWe have just issued our annual reportÖ we donít have to do anything until the year-end of 2006.í Investor Relations Officer

ëAnything the DTI requires, we will doÖí Financial Controller

ëWe always had covered it in our social and environment report.í Financial Controller

ëWe have other things to think about. Are we required to do this? If we are, we will but if not, we wonít. It must depend on when the financial year starts for each company.í Finance Director (interim)

ëI havenít drafted all the requirements, but we are trying to comply.í Group Project Financial Controller

ëOur shareholders will be more interested in the progress of our product development and will trust us to recruit properlyÖí Chief Financial Officer

One finance director summed-up the thinking of many other finance people when saying: ëThere is so much stuff to do and no time to concentrate on these things. Itís not that we are not willingÖ but there is a limit on what you can do.í

WHAT HR PEOPLE THINK
Some 84% of HR people claim to be aware of the OFRís new human capital reporting requirements and share a number of views re its timings and relevanceÖ

ëWe include this information in our company reports anyway ñ what do you mean by OFR? Itís just government jargon.í Director of Personnel

ëWe already (include human capital reporting) and have been for a few years.í Group HR Director

ëIt depends on the financial year; ours is a calendar year.í HR Director

ëIt is not compulsory at present so companies donít have to do this, but my company has been doing it for four years.í Head of Employee Research and Measurement

Underlining that not all companies are fully clear on where responsibility for producing the OFRís human capital reporting lies, one company secretary said:

ëItís to be decided between the HR director and the finance director.í