People Are Paramount

It may be an old cliché 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 the UK women out perform men at all educational levels. I know there is a similar pattern in New Zealand as well.

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

That question invariably has a common response. Women have babies, which in many cases (though not all) results in them leaving the work force. When they return they are often in a position of playing catch-up to their male counterparts who have continued up the corporate ladder in their absence.

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

Women, like men, in the early years of their career often left their job due to a desire for career-change. However later on, women, unlike men, tended to leave their jobs because they were not getting the same opportunities to rise up the corporate ladder.

In overlooking the talent that women offer, through both pay and promotion, companies are not effectively managing their resources as well as they could.

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

One of the keys aims of the review was to encourage the most effective use of the skills and experience of both men and women to both their benefit and to the benefit of businesses and the economy in terms of productivity and competitiveness.

There is clearly an overwhelming business case for the effective use of the talents and abilities of women as a national resource. It is this business case that offers the greatest potential for reducing the pay gap.

This has been recognised by the boards of many of Britain's leading companies.

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.

The challenge does not end with getting the right people for the job. 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 long-standing business cliché 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 in 2003 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'. This common workplace problem can best be described as the jacket on the back of the chair syndrome - people aren't actually doing more work, they're often just spending more time at work.

In my discussions with New Zealand's EEO Commissioner Dr Judy McGregor, while I have been here, 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 work place and the people that work there that is at the heart of effective human capital management.

HCM should not be the domain solely of large corporates either. 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. Having managed a small business myself I know the benefit of flexibility.

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 is so heavily dependent 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.

- Mrs Denise Kingsmill CBE is a British-based employment and pay equity expert and was in New Zealand last week, hosted by the Human Rights Commission and the New Zealand Centre for Women and Leadership at Massey University.

Mrs Kingsmill's visit comes on the eve of the report of the Taskforce on Pay and Employment Equity in the public service and public health and education sectors, which is scheduled to report in March.

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