UK pension scheme Railpen, the Pensions and Lifetime Savings Association (PLSA) and the Chartered Institute of Personnel and Development (CIPD) have called on FTSE 350 company CEOs to improve the quality of their workforce reporting, providing practical guidance. While evidence on the materiality of a motivated, fulfilled and engaged workforce is well-established, workforce-related topics – and how they are discussed by companies in investor-facing communications – will become more important for companies and their investors in the years ahead, the three entities wrote in a letter. Following new commitments from the Labour government in relation to the UK labour market, including likely workforce reforms, there is a greater need for more consistency and transparency in workforce reporting, they added. “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,” said Caroline Escott, Senior Investment Manager at Railpen. “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.” Railpen, PLSA and CIPD urged the companies to review and update disclosures across four key areas: workforce composition, employee relations and wellbeing, reward and recognition, and skills and capabilities. The letter builds on the publication of the Workforce Reporting Framework by Railpen, the High Pay Centre, Board Intelligence, CIPD and PLSA in 2022, which set out information that companies should consider disclosing.
