Jonathan Haskel, Professor of Economics at Imperial College Business School, took part in the Accounting for Human Capital talk at the World Economic Forum in Davos on 24 January.
The talk raised the issue of human capital – the value represented by the skills and experience of employees – being vulnerable to underinvestment because it is an intangible asset that does not feature on a company's balance sheet.
In the panel discussion led by Amy Bernstein, Editor of the Harvard Business Review, Jonathan, a member of the Bank of England’s Monetary Policy Committee, argued in favour of companies investing more in retraining and improving the skills of employees, and stressed that they already have the necessary tools to do so.
"Like other assets, human capital is productive. It's like a building... or planes. On the other hand the planes wear out in the same way that human capital wears out and there needs to be retraining," he said.
"The tools that we've got for accounting for all of this are available... this is not an impossible problem. I think it requires a bit of will."
He examined how, when properly deployed, the skills and experience of employees should result in a high level of productivity, increasing a company's market position and profits.
Among his many roles, Jonathan is an elected member of the Conference on Research in Income and Wealth (CRIW) and a research associate of the Centre for Economic Policy Research, and between 2013 and 2016, Jonathan was an elected member of the Council of the Royal Economic Society.
His fellow panel members were Christy Hoffman, General Secretary at UNI Global Union, a federation representing over 20 million workers from more than 150 different countries in the skills and services sectors and Alain Dehaze, CEO at leading global recruitment firm Adecco Group.
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