Earlier this year, the Financial Reporting Council released a report from its Financial Reporting Lab on workforce-related corporate reporting. It turns out that current annual reports are not giving investors what they want when it comes to describing what is often a company’s most important asset and its largest single expense.

The modern workforce is more complex than ever. The growing use of contractors and gig economy workers means that a company’s workforce can extend well beyond its actual employees. Automation, artificial intelligence and long-term demographic changes are also disrupting the world of work. At the same time, companies rely on their people for every aspect of value creation, whether that’s creating innovative products or keeping customers happy. Effectively managing employees should therefore be near the top of every corporate agenda. Indeed, research quoted by the FRC shows that companies with high levels of employee satisfaction deliver meaningful outperformance in long-term shareholder returns.

Given the centrality of employees to every business, it’s a little surprising that the quality of reporting about the workforce consistently falls short. We recently wrote a post for our friends at Farraday giving more information about the issues and how companies can effectively communicate about their workforces. Read more about it here.

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