As Director of HR for SSE it won’t surprise you to learn that the ongoing debate about the importance of valuing people is right up my street. That’s why I’m excited to be addressing an audience from the investor community at the London Stock Exchange today (Nov 20th).
The reason for doing so is that our ground-breaking work measuring what is called ‘human capital’ is beginning to get noticed. As a company, our human capital is made up of the productive capacity of all the people we employ – their combined talent, skills and knowledge.
This is what enables our organisation to function and thrive, from the engineers operating our power stations to the customer service advisors in our call centres. We were the first company to measure and put a monetary value on this important resource in the way we have; generating a number we can actually crunch and use to develop future strategy. It can also illustrate the economic value that our training programmes generate for our trainees, our company and wider society.
And in case you’re wondering what the number came out as it was £3.4bn which is pretty impressive and confirms what we knew all along – that our people are one of the most valuable assets that our company has.
Still, why should this matter to investors? Well up until now investors tend to look at the physical assets we own, such things as our power stations, wind farms, pipes etc when deciding if we’re a good company to put their money in. But what if they could look at how we value our people and the contribution we make to investing in growing this resource in a totally new way? Well, now they can.
I checked in with our Investor Relations team this week and asked them to undertake an analysis of the questions they’ve been asked by our investors over the past twelve months. It makes interesting reading:
- Around 2,500 question have been recorded over that time
- 24% were about group strategy (and rightly so)
- 15% were about political and regulatory risk
But a mere 1% were people related (mostly senior management).
So, I think there is a lot of room for investors and shareholders to spend a bit more time analysing how companies build, maintain and expand their human capital. It is, after all, the extent of the ability, talent, knowledge and skills of people in companies like SSE which ultimately determines their capacity to deliver returns for shareholders.
We value our employees very highly and we’re sure others will too. Hopefully the discussions today will encourage investors to ask companies what they are doing to develop and invest not only in their physical assets but also in their people.