The 2nd P&L – What is Making Your Competitors More Successful Than You

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In an ever more data-driven world, most business owners are well aware of the importance of monitoring their traditional Profit & Loss (P&L) account. However, ask any good leader what their businesses biggest asset is, and they’ll nearly always say it is their people.

Despite this, recent research published by the Valuing Your Talent Partnership found that one third of the FTSE 100 companies, are continuing to fail to report on critical human resources issues, including all important employee turnover rates to their detriment. There are key opportunities being missed by not adequately measuring an organisations workforce engagement, wellbeing and happiness.

To an investor, the failure to report potential threats that come from their human pakistan phone number resource capital must also provide reason for concern. These intangible assets, your people and leaders after all are the driving force of your business. And for SMEs this provides a stark warning – start listening to your people from the start. They are the key factor in its success and growth in future.

In relation to the report, former Business Secretary, Vince Cable commented: “It shows a poor understanding of the significance of people-related data… Having a clearer view of the people in our workforces can only be a good thing; it could lift the lid on our productivity issues and the skills challenges that are preventing so many businesses from reaching their potential.”

Measuring your people means looking at key influencers like engagement, motivation, wellbeing, reward, recognition, culture, leadership and management and their impact on the business and its financial performance. Having a clear view on your team and by measuring sentiment regularly, allows business owners to minimise the impact things like staff turnover, skills gaps, absenteeism and the ever increasing cost to recruit have on their company.



Out-dated one dimensional views are stifling business performance
So why have we still not formally embraced measuring this intangible asset in the same way we do our revenue, profit and other more tangible key business success metrics? Looking only at a financial P&L produces a one dimensional view of the business and its future potential for growth. To generate a truly 360-degree view, business owners should be mindful of keeping track of their ‘2nd P&L’ – measuring the effectiveness, productivity and stability of their people and leaders.