In today’s low unemployment environment, job openings continue to be vacant, and companies need to have a viable talent strategy in place to keep top talent and recruit new talent, while minimizing job hopping. Part of that is done through engaging the board more readily in a company’s talent management strategy and, in some cases, elevating the chief human resources officer (CHRO) to the board. “Boards are interested in integrating human capital metrics into oversight responsibility, and they understand that investment in the workforce is an asset, not a financial liability,” says Meredith Miller, chief corporate governance officer for UAW Retiree Medical Benefits Trust. Some boards are also broadening the responsibilities of the nomination and governance or compensation committee. Eva Sage-Gavin, a senior managing director at Accenture, says, “We’re seeing the classic compensation committee is now becoming the organizational development and compensation committee,” or the creation of subcommittees charged with developing strategic workforce agendas. These committees enable board members to be more actively engaged with management and ensure that the talent pipeline remains a top priority, with, at the very least, annual reviews of workforce strategies. In addition to assessing how well the current workforce aligns with corporate strategy, board members also want to identify which workforce considerations are most important to carry out the company’s mission, to maintain efficiency standards, to keep workers engaged and productive, and to stay competitive within its industry. Qualified HR experts who know their industry can help boards identify effective ways to address assessing workforces. Sage-Gavin says that human capital measurement can unlock additional value for companies that ask the right questions and measure the right metrics. Companies operating in industries grappling with digital transformation must also accommodate a dual workforce: experienced workers capable of delivering on current customer needs and digitally savvy next-generation employees who will help it transform for the future. Boards should consider the costs, risks and rewards of reconfiguring their workforces through training on new systems and technologies, as well as “reskilling” internally and in collaboration with technical schools, colleges and universities. Thomas Bakewell, CEO and board counsel at Thomas Bakewell Consulting, adds, as competition for talent continues to intensify, it’s critical that boards give human capital strategy challenges like these the same level of scrutiny that they devote to financial capital.
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