PLSA: Industry partnership to study the ‘S’ factors

16 June 2021

The Pensions and Lifetime Savings Association (PLSA) has partnered with the CIPD (the professional body for HR and people development), the £32bn pensions giant RPMI Railpen (Railpen) and think tank the High Pay Centre to understand investor expectations and how effectively the UK’s largest listed companies are discussing and responding to workforce factors, which have been brought into sharp focus during the pandemic.

The group, which brings together both sides of the company-investor dialogue, will explore what key workforce metrics are of most value to investors and examine the annual reports of FTSE 100 companies to assess how well they explain their employment models and practices in relation to company strategy.

It intends to explore areas including the disclosure of workforce composition, such as gender and ethnicity; stability of the workforce; skills and capabilities; and engagement and well-being. Within these major themes, metrics including aggregated turnover rate, the proportion of full- and part-time staff, employee share ownership, living wage accreditation and time lost to sickness and injuries, mental health sickness rates, gender and ethnicity pay gaps and age diversity of the workforce will also be under review.

It will build on earlier studies conducted by the PLSA, CIPD and the High Pay Centre which found that investors’ interest on material workforce issues has not been translated into consistent corporate reporting and as a group, blue chip companies still had some way to go to achieving best practice, despite some notable good examples. The research will be supported by insights from company engagements conducted by the Railpen team, who have since March 2020 been probing portfolio companies on their approach to looking after employees’ physical, mental and financial wellbeing.

With £2.2 trillion of assets under management, pension scheme investors wield significant influence in encouraging corporate best practice and success. They demand high levels of disclosure around employment practices because companies that look after their workforces tend to outperform their competitors.

The research project, which will be led by the public policy team at the CIPD, is especially relevant following the government’s launch of a consultation intended to scrutinise the effectiveness of occupational pension scheme trustees’ current policies and practices in relation to social factors.

Source: Pensions and Lifetime Savings Association