Valuing Our People

Universities create value through their people. And just because the value of people is difficult to measure, does not mean that it cannot be recognised and celebrated, writes Simon Perks of Sockmonkey Consulting.

Higher education is a ‘people’ business. It is through our people that we educate our students, undertake our research and engage with our communities and partners. But our people do not appear on our balance sheet and their contribution is not recognised in our income statements. So how can we demonstrate the value that our people create and the part that they play in our success?

These were among the issues discussed at Advance HE’s recent workshop for its ‘Integrated Thinking & Reporting’ project. Ten ‘pilot’ institutions from across the higher education sector have been looking at the wider concept of value in a project considering how we communicate more clearly the ways in which higher education institutions create value in the short, medium and long term.

The project draws on the principles and practice of the Integrated Reporting framework, which has been designed by an international alliance of accountants, regulators, companies and not-for-profit organisations. At the heart of the framework lie a series of ‘capitals’ – or resources – that organisations use to create value. This includes the organisation’s ‘human capital’ – its people.

Not everyone is a fan of referring to people as capital, as assets or as resources. But it is undeniable that they lie at the heart of an organisation’s ability to create and sustain value. There is always a trade-off to be considered when making the decision about investment in Human Capital.  

But human capital is not like other forms of capital. It cannot be owned. It cannot be moved around at will, though it can choose to leave. And people have good days and bad days, so their productive capacities vary over time. Consequently, the value of an organisation’s human capital is extremely hard to measure.

Which is, perhaps, why most organisations simply don’t bother. The only place that a university’s people appear, for example, is as an expense in the income and expenditure account. As a cost to the organisation. Usually the biggest cost, too. And when it comes to the (financial) crunch, it is our costs that we seek to cut. Starting with the biggest.

How we identify, record and demonstrate the role of our people in creating value is not easy. But it is important.

Various approaches exist to determining the value of an organisation’s human capital. A common way is to measure the extent to which human capital contributes to the achievement of organisational outcomes. But measuring this is hard. And putting a financial value to it is very hard. Thankfully, however, it may also be unnecessary as perhaps institutions just need to begin by telling a credible story about how engaged, empowered and confident people with relevant skills and resources deliver sustainable value. 

Telling the organisation’s story is what Integrated Thinking and Reporting is all about, as we don’t always need numbers. So rather than ignoring the contribution that your people make, or getting into complicated discussions about how to measure their impact on the bottom line, why not start simply by telling stories about the value they create, and tell it consistently over the medium and long term. Begin with the big picture, perhaps, and then give specific examples of what people have done and the difference that it has made.

This could include, for example, the work that your academic staff do in teaching the next generation, in undertaking ground-breaking research, in bringing new technologies to market or in broadening the reach of higher education to encompass those who would previously have taken a different path.

A closer look might reveal fantastic teachers who use innovative methods to engage students and to enhance their learning. Dedicated researchers developing novel materials, creating new economic models or generating new insights into the classical world. Gifted communicators who bring the wonders of science to those with physical impairments. And professional services staff, of course, working tirelessly behind the scenes to make best use of resources (capitals) such as estates, intellectual property or strategic partnerships.

It is an organisation’s assets that allow it to create value. And one of the most valuable lessons from the Integrated Thinking and Reporting project is that a university’s people are an asset to be valued, not a cost to be managed. This requires a significant change of mindset for most organisations. But, as Advance HE’s project is demonstrating, it is through Integrated Thinking and Reporting that we can make it happen.

Article written by Simon Perks from Sockmonkey Consulting.

For more information about Integrated Thinking and Reporting in HE contact Kim Ansell, kimansell@advance-he.ac.uk

You can be part of the conversation at Advance HE’s forthcoming conference Let’s talk value on 11 September, where senior leaders will explore how they can change the narrative about the concept of value in the sector. One workshop will specifically focus on ‘Valuing our people: HEI’s hidden assets’, in which Helen Scott, Executive Director, Universities HR will be participating.