Utility Week

20 | 13TH - 19TH MARCH 2020 | UTILITY WEEK Operations & Assets Market view A roundtable of HR directors hosted by Energy & Utility Skills found that utilities are in good shape when it comes to putting a proper value on people and skills – but there is much work ahead, says Nick Ellins. A s utility human resources directors sat down at the latest Energy & Util- ity Skills strategic roundtable at The Ivy in Birmingham last month, No 10 was announcing that it would be prioritising infrastructure as an engine for the UK econ- omy, and it restated its faith in HS2. Neither of these goals can be achieved without having the human capital to do the job – a„ ordably – and their pursuit should ensure that the human resources leaders involved are heard and scrutinised at board level for some time to come. HR directors should be heard not just for what they do for skills and training as inputs, but also because HR is critical to the outputs of ensur- ing strategic corporate delivery. The series of roundtables is entitled "As I Said To The Board" and is a collaboration between Energy & Utility Skills, Utility Week, and Network HR. Its aim is to stimulate the utilities sector to better recognise and talk about its human capital, and introduce expe- rienced external experts to help explore the issues surrounding it. What is human capital? The ‰ rst item on the agenda was what was meant by "human capital" in the ‰ rst place. It is a term abhorred by some outside the room, but increasingly governments, regu- lators, investors, regulated companies, and major supply chain partners – encouraged by trade unions – are accepting that work- force resilience and skilled human assets are what ultimately delivers strategy and ‰ nan- cial returns. Discussions about human capi- tal easily mirror those for ‰ nancial capital, natural capital, and the rest. The government has already told the OŒ ce of National Statistics (ONS) to develop a more sophisticated measure of human "Increasingly, governments, regulators, investors, regulated companies, and major supply chain partners are accepting that workforce resilience and skilled human assets are what ultimately delivers strategy and fi nancial returns." NICK ELLINS, CHIEF EXECUTIVE, ENERGY & UTILITY SKILLS a more sophisticated measure of human "Increasingly, governments, regulators, investors, regulated companies, and major supply chain partners are accepting that workforce resilience and skilled human assets are what ultimately delivers strategy and fi nancial returns." Unlocking capital, as part of its e„ orts to grow the UK economy. In late 2019, the ONS launched an initial consultation, advising that it would be the ‰ rst of several phases in what will now be a wider review of measuring, understand- ing and building human capital. Network HR said that institutional inves- tors are in the same space, with more than 130 organisations with a combined worth of more than $15 trillion under management, seeking a de‰ ned value for human capital, and increasing workforce disclosure. Around the table sat pioneers for just such an approach. One energy company in attendance – SSE – has set out clearly its belief that there are high returns to be had from investing in people. It has published a landmark report, Valuable People; Valuing SSE's Human Capi- tal, and another on the business rationale for inclusion, Valuing the Di erence; It Pays to be Inclusive. And one of the water companies present, Severn Trent Water, has laid its cards on the table by committing to build one of the ‰ rst bricks and mortar utility academies. The ini- tial input into building capital will deliver an inevitable rise in human capital. And not just for the company, but for other water compa- nies and strategic partners. One of the consensus points that emerged from those around the table was that these HR directors had pursued evidence-based approaches and their boards had accepted that evidence as robust and pivotal to corpo- rate success. Regulatory focus More widely, Ofwat and Ofgem were recog- nised by attendees for delivering a welcome focus on human capital in the business and boardroom by enshrining workforce resil- ience as a requirement in the PR19 and RIIO2 price-setting methodologies. The discussion progressed on to how human capital value can best be enhanced, such as by embedding inclusion and diver- sity. The pioneering Ignition Brewery, which employs people with learning diŒ culties, was sited as a particularly exciting example. The commercial business case for hav- ing a diversity of perspectives in any organi- sation was recognised as inarguable, with global consultancy research showing empiri- cal outperformance against non-diverse organisations, and consumer bene‰ ts from having a workforce that mirrors the commu- nity it serves. A fascinating insight on the night was what to do when a company has a driving

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