The quality of Human Capital Management (HCM) disclosure was the subject of a recently completed research project, reported in the Australian Financial Review on 14 January 2008. The project looked specifically at how Australia's 50 largest ASX-listed corporations reported on how they managed their people in 2007.

"From companies that managed to get a handle on what has traditionally been referred to as a 'soft' and 'feel-good' exercise, the pay-offs are very real. Employees look to HCM disclosures for assurance about the type of workplace a potential employer provides and investors have begun factoring HCM disclosures into their decision making" says Kellerman.

Craig McCallum of Mettle Group says "there is much evidence around the impact nurturing the 'soft' skills has on the financial performance", for example

• "Happy staff equals happy customers equals happy shareholders. Staff turnover at Westpac has fallen from 17 to 14 percent in the past five years, which translates to $50 million cut in recruitment costs and is reflected in fewer sick days and better productivity. Seven years averaging 11 percent compound earnings-per-share growth and returns on equity averaging 20 percent, tell you that CEO Dr David Morgan has performed."
• "Fortune 100 'Best companies to work for' have provided a higher than the S&P over seven years, showing a positive relationship between a strong, affirming culture and performance.
• Other evidence can be found at http://www.mettle.com.au/our_approach/default.aspx

The question for readers is, how does your company manage its Human Capital and how do you measure your HCM efforts?

The responsibility of culture does not only sit with the top brass of organisations, but also with HR Professionals and middle-management. What we find organisations are struggling with is not so much the idea of culture, but rather with the execution and aligning the outcomes of culture work to strategy and other tangible measurements. This is where Mettle comes in. There are clear performance indicators you can put in place once you get the culture journey mapped out says McCallum. It does take work and it is not a quick fix program – you certainly have to be on your mettle to undertake a full culture program and be prepared for some tough times – but since when did anything that truly made a difference come without growing pains?

Mettle Group has been working with organisations for over 20 years on balancing the soft and hard wiring skills within organisations. For years we have been educating businesses on the ROI companies will experience once they concentrate on the culture. The success our clients have experienced when they get this right is exciting. What is less exciting is the number of organisations and leaders that continue to doubt the importance and value of working on the soft wiring skills says McCallum.

When you read quotes from respected CEO’s like Dr Morgan, CEO Westpac Banking Corporation that suggest a $50million saving in recruitment fees due to focusing on staff, how can you not invest in nurturing the ‘soft skills’ in your organisation?