Human Capital as an Asset: An Accounting Framework to Reset the Value of Talent in the New World of Work
The COVID-19 pandemic has accelerated a shift to new ways of working, prompting companies to reimagine how, where and by whom work gets done. This shift was already under way with the technological changes of the Fourth Industrial Revolution. As companies look to reset for the new world of work that emerges from the pandemic, they would benefit from an approach that values talent as a key asset that contributes to an organization’s sustained value creation. This calls for the development of a new human capital accounting framework, which would enable a company’s board and management to track how their investment in people is augmenting the firm’s human capital, and support the delivery of better outcomes for the business, the workforce and the wider community. This report, a collaboration between Willis Towers Watson and the World Economic Forum, seeks to provide such a framework. It is an important component of the Forum's HR 4.0 initiative, an approach to shaping people strategies in the Great Reset to collectively build a more fair, sustainable and resilient future.