New analysis from the CIPD and Railpen supported by the High Pay Centre highlights need for improved workforce reporting to strengthen transparency and reveal how well firms invest in and manage their people
A new report, Future of Workforce Reporting, warns that inconsistent and incomplete workforce disclosures by FTSE 100 companies are preventing investors and other stakeholders from fully assessing the people-related risks and opportunities that underpin sustainable growth.
The research from CIPD and Railpen supported by HPC – based on an evaluation of FTSE 100 annual reports, desk research and focus groups with investors and HR leaders – shows how stronger workforce data can drive better business performance, accountability and improved outcomes for the workforce.
While disclosures have improved in some areas since 2022, such as mental health and aspects of diversity, the level and quality of reporting on other material workforce issues have seen little progress or declined in some cases.
It shows that many organisations still fail to provide key information needed to understand how they create value and manage workforce risks. In response, the report urges companies, investors and policymakers to prioritise clearer, more consistent workforce reporting to give a fuller picture of organisational health and long-term value.
Key findings include:
- Employee voice: Just 28% of firms reported a mechanism for workforce voice that could be considered genuinely meaningful, reinforcing previous HPC work outlining how firms typically favour more informal and often less robust mechanisms for workforce engagement.
- Employee skills and capabilities: Just 10% of firms disclosed information on total training costs, while 41% provided information on hours of training per employee.
- Collective bargaining coverage: Just 18% of the sample disclosed the percentage of the workforce with union membership or covered by collective bargaining agreements.
- General prominence of workforce reporting: Just 11% of firms were self-critical of their own employment practices, raising concerns about the honesty of corporate reporting.
- Greater prominence of financial reporting: Only 18% of all KPIs recorded were people-related, versus 51% relating to financial performance. Only 48% of companies detailed targets or information on progress towards these as part of their people KPIs.
- Employment relations/ bullying or harassment: 27% of organisations provided information on the number of disciplinary, grievance or whistleblowing cases; just 10% provided information on the reasons.
To improve workforce reporting practices the report contains clear recommendations to policy-makers, companies and investors, including:
- The need for annual reports to include a standalone section on the workforce: Only 53% of firms analysed had a dedicated people section in their annual report. By consolidating all people-related information in one place with a clear narrative, stakeholders will have improved visibility, clarity and understanding of workforce metrics and measures and how they fit together.
- Setting minimum reporting standards: To show a holistic picture of workforce treatment, organisations should consistently report on workforce composition, wellbeing, reward, employee voice and skills. Metrics should be clear and comparable with disclosures linked to how they support business strategy and outcomes. The report notes that the International Sustainability Standards Board’s (ISSB) work on baseline workforce disclosures could serve as a future framework and standard.
- FRC to consider providing additional guidance on workforce reporting: The lack of consistent, comparable reporting on workforce data and boilerplate disclosures can make it harder for investors and others to understand and compare different companies’ reporting. To support progress in the area, the Financial Reporting Council (FRC) should consider inviting companies, investors and wider stakeholder groups to explore ways in which to improve workforce reporting, such as through improved guidance for companies that comply with the UK Corporate Governance Code.