Denise Kingsmill: Firms neglect best staff: women

COMMENT

It may be a cliche but business people generally agree: the most important asset a business has is its people. It follows that a business should aim to attract the best people.

In Britain, women outperform men at all educational levels. I know there is a similar pattern in New Zealand.

So why is it that in Britain, at least, there is an 18 per cent gap in the rate of earnings between men and women?

That question invariably has a common response. When mothers return to the workforce they are often in a position of playing catch-up to their male counterparts.

In 2001 the Kingsmill review on women's pay and employment, which I chaired for the Secretary of State for Trade and Industry in Britain, found there were other reasons women left their jobs.

In the early years of employment, men and women left to change careers. But later on, women tended to leave because they were not getting the same opportunities.

In overlooking the talent that women offer, companies are not managing their resources as well as they could.

What we found in 2001 was that although company bosses generally agreed that people were their greatest asset, this was not often recognised as a guiding principle of business strategy.

There is clearly an overwhelming business case for the effective use of women's talents and abilities, and the boards of many of Britain's leading companies recognise this.

A wide range of companies have carried out employment audits and have taken the necessary steps to become employers of choice. The main driver for these strategies has been competitive advantage.

But it's no use picking the cream of the crop if the working environment is not a positive one. It sounds simplistic and is perhaps another business cliche, but happy workers are productive ones.

In Britain, many companies are now reporting on human capital management (HCM), an approach to HR management that treats it as a high-level strategic issue as part of their annual report and accounts. Following another review I chaired last year on the issue, this will soon be a required task for larger companies.

Effective human capital management can help address work-life balance issues such as "presenteeism", where people aren't doing more work, they're often just spending more time at work.

In my discussions with New Zealand's Equal Employment Opportunities Commissioner, Dr Judy McGregor, it is clear that New Zealand businesses will need to consider innovative solutions to address issues such as presenteeism. It is this focus on innovative and flexible business solutions to meet the needs of each workplace and the people who work there that is at the heart of effective human capital management.

HCM should not be the domain solely of large corporates. Although small-business managers face compliance pressures, they can often take advantage of a degree of flexibility that isn't always present in larger organisations.

In bigger companies with dedicated HR divisions, the pivotal role of human-capital management is often overlooked at the strategic level and left to the HR people to take care of. I mean no disrespect to human resource specialists, of course, but an organisation's success depends so heavily on the performance of its people that it warrants the most senior attention in any organisation.

After all, it is a very strange company indeed where people are not considered material to success. The challenge is to make work people-shaped to improve productivity.

* Denise Kingsmill is a British-based employment and pay equity expert and visited New Zealand this year.