The Pensions and Lifetime Savings Association (PLSA), along with Railpen and the Chartered Institute of Personnel and Development (CIPD), has called on FTSE 350 CEOs to improve workforce reporting.
According to them, transparency and consistency in reporting are key as employee engagement becomes more important to businesses and investors, especially in light of impending labour market reforms in the UK.
Companies are urged to update disclosures in the following important areas: skills development, reward and recognition, employee relations and welfare, and workforce composition.
Their suggestions expand on the 2022 Workforce Reporting Framework, which highlights best practices including using consistent data, aligning reports with strategy, and obtaining external assurance.
PLSA head of defined benefit, LGPS, and investment Justin Wray says: “Good workforce reporting benefits asset owners, the company making the reports, and employees. We support this call on FTSE 350 companies to give more attention and consistency to workforce reporting. Focus on this area will only increase.”
Railpen senior investment manager Caroline Escott says: “While we often see companies stating that their workforce ‘is their greatest asset’, this is not always accompanied by concrete evidence of how employment practices relate to the firm’s wider strategy. Investors want to support and invest in companies that are well-positioned in terms of how they manage their people, and in turn, look to issuers to provide access to clear, comparable information on material and decision-useful workforce factors.
“As workforce reporting becomes a greater focus area for government policy, our Workforce Reporting Framework and Guidance remains a useful tool to enhance the quality of company reporting on employment models and working practices. Members trust us to be active stewards on their behalf, so we will continue to highlight good practices and support companies that invest in their people and effectively communicate this to their shareholders.”
CIPD chief executive Peter Cheese says: “Raising the quality and consistency of workforce reporting can help provide more transparency over how companies recruit, train and manage their employees and the extent they are engaged in responsible and sustainable business practices that can improve both firm performance and job quality.
“Improvements in this area can therefore also encourage business leaders to focus on developing their workforces and help investors better understand differences in the quality of management at different companies to inform their investment decisions. It can also give potential employees a better understanding of how companies value and invest in their people.”