Financial Times - Need to quantify human capital in annual reports

A top hotelier last week made an interesting suggestion: quantifying the value of human capital in a company.

“Isn’t it bizarre that the balance sheets of company reports portray the wealth of the organisation only as contained in its Fixed and Current Assets? We must challenge the accounting profession to develop a means of quantifying the value of what is claimed by many pundits to be ‘the most valuable assets of the organisation’ – the human capital,” noted Anura Lokuhetty, chairman of the Hotel and Catering International Management Association (HCIMA), Sri Lanka chapter, at the inauguration of the HCIMA national conference and book launch recently.

He said it was difficult for the hotel industry to attract and retain capable people. While on the one hand, many professionals and skilled staff have either migrated or secured employment overseas, local training institutions like the Ceylon Hotel School have also failed to attract talented youth as the industry has lacked lustre in the last two decades, mainly due to the security situation and unrest in the country.

“What then should we as industry leaders and professionals do? The answer lies in harnessing the talent, and in boosting the image and value of the profession, to its full potential. We are a highly human intensive industry. I am certain there is still much attraction in the human element in service; provided it is professionally executed of course,” he said.

Raising the question as to why Sri Lanka has been unable to attract the top end of the tourism market, Lokuhetty said there were many reasons -- some being national issues, that need to be addressed at a higher level by the state while a very important element is the quality and consistency of services.

A book written by 16 eminent hospitality industry professionals – which formed the basis of the agenda for the national conference, was launched at the ceremony.