The view that people are the construction industry's 'greatest asset' does not sit comfortably with financial procedures for the valuation of personnel (NCE 9 March).
Accounting methods have difficulty in viewing people and their capabilities as an asset. When one company is about to be bought by another, the employees appear on paper as a cost.
By contrast, an item of construction plant is viewed as an asset.
Similarly, while the benefits gained from training are difficult to value, the cost is easier to quantify.
Respect for people is more likely when personnel are valued as assets on the balance sheet. The use of key performance indicators relating to staff competence (ie. putting into practice what has been learned, rather than trying to 'value' the training itself), is a step in the right direction.
What other ways do readers have for quantifying human capital within financial reporting procedures?
Colin Cotter (M), email@example.com