August 16, 2001

Human-Capital Issues Catch Wall Street's Eye

Hardly a day goes by without a major breaking business story that a top executive or lieutenant is being investigated or dismissed for incompetent or unethical behavior. It is no wonder that investors on Wall Street are looking behind the numbers and at the quality of a company's senior management and human capital. "Rising fast to the top of the list is a CEO's relationship and connectedness with rank-and-file employees," says Smooch S. Reynolds, president and chief executive officer of Repovich-Reynolds Group, an executive-search firm in Pasadena, Calif.

"Wall Street is watching this component of corporate values with hawk-like vigil, as it represents a 'value' -- that value being a sign of a leader and how significant employees are in the eyes of management," Ms. Reynolds told a group of investor-relations professionals at the National Investor Relations Institute Conference in Palm Springs, Calif. Investor-relations executives will have to be more thoroughly schooled in how human capital and corporate culture affect top-line revenue and corporate profits. "This will rapidly become a part of regular conversation with Wall Street," Ms. Reynolds added.

Work Issues Put a Damper on Vacation Plans

The long reach of workplace obligations may be holding managers back from enjoying their summer vacations. Less than 35% of managers surveyed by the American Management Association say they will be away from the office for longer than a week this summer. About 40% of those on vacation will have to leave behind contact information and their itineraries. In addition, 25% will be in daily contact with the office while away.

With a tenuous economy in the background, managers feel summer vacation plans can't stand in the way of winning or maintaining business relationships. More than 35% of managers say they will be conducting office-related work while they are away and 16% will be in touch with clients or customers at least once a week.

Expatriates Remain Concerned Over Health and Safety

With international tensions growing more acute recently, it should come as no surprise that employees on overseas assignments are concerned about health and safety issues. "They think they are not being provided with the preparation and support they need," says Virginia Hollis, vice president of global markets for Cigna Corp.'s international global-benefits group.

In a survey conducted by Cigna, human-resources industry trade group WorldatWork and the National Foreign Trade Council, more than 55% of expatriates said they need more information about the adverse health and safety conditions they face.

These professionals also feel more help isn't being made available to them, despite rising international tensions. "Expatriates are looking for peace of mind and aren't getting it," says Ms. Hollis.

Multinational companies invest an average of $1.3 million per expatriate for a typical assignment.

HR Executives Reveal Their Priorities

Human-resources executives recently met at a breakfast roundtable in Short Hills, N.J., and decided that talent issues and succession planning are among their top priorities. The event, sponsored by HRD Consultants, Clark, N.J., also prompted HR execs to decide they "must help the organization to recognize and deal with fundamental changes."

Among the other issues receiving major attention: helping employees who want more balance in their lives and assisting executives with leading during a downturn. One of the more significant conclusions to emerge from the proceedings is that HR should "have the courage and skills to influence a shift in the thinking of the CEO and executive team from short-term issues to long-term growth."

By David Beck