HUMAN CAPITAL AS AN ASSET: PAGE 22 AN ACCOUNTING FRAMEWORK FOR THE NEW WORLD OF WORK HUMAN CAPITAL DECISIONS IN PRACTICE Situations in which better human Delivering ‘win–win–win’ capital accounting could have made a outcomes difference Although many organizations have adopted a principled approach to their workforce Companies that ignore the guiding principles during the crisis, there are also examples of companies whose approach has outlined have much to lose. For example, they fallen short. These include businesses that, in order to mitigate steep declines in could face a toxic workplace culture; a 2019 revenue, cut workforce numbers and forced employees to take unpaid leave – but then announced large payouts for shareholders. Such actions reflect a narrowly study revealed that such a workplace culture has shareholder-focused model that places insufficient value on human capital and has cost the US $223 billion in turnover over the past longer-term costs for the company as well as negative externalities for society. 24 five years . In contrast, when an organization Other enterprises announced rich rewards for chief executive officers, or initially cut takes a longer-term view; creates value with pay for executives only to defer remuneration for the future in cash or equity, even purpose; adopts a mindset of people, work and while furloughing or laying off employees. Such misallocations of resources are in part skills; invests in the workforce; and sees itself a result of companies undervaluing their human capital more broadly. as an actor in an ecosystem with a well-defined In other cases, poor management of workforce health and well-being has led to level of social responsibility, it is a “win-win-win” unsafe workplaces, where guidelines for physical distancing and proper hygiene were situation for the business, the workforce and ignored, sufficient personal protective equipment (PPE) was lacking, and bonuses that incentivized attendance may have contributed to employees working while ill. Lax the larger community. Better human capital safety measures have put workforces, their families and the communities in which accounting incentivizes such outcomes. they operate at high risk of infection and have caused considerable reputational costs to the companies involved. Companies that undervalue their workforce are more likely to take actions with negative implications for employee health and well-being.