Despite constraints on both their human and financial capital, Small- and Mid-Sized companies (SMIDs) share similar business ambitions with their larger counterparts while competing for the same talent. They need talent to fuel their growth, yet that rapid growth can strain employees. Attracting and retaining talent, while simultaneously maintaining workforce productivity, poses a challenge.
To grow profitably, they must retain their talent and attract more, while competing with larger companies for the same talent. We have discovered that these rapidly-growing European companies take their need for human capital seriously. Here, we present the data we collected in the two phases of our (still ongoing) campaign.
Human Capital Management (HCM) has long been an issue for investors and a target for Engagement with large-cap companies through collaborative efforts such as the Workforce Disclosure Initiative. Few of even these large companies are transparent, or prepared for new reporting requirements soon to be required under the EU Corporate Sustainability Reporting Directive (CSRD).
In 2020, our European SMID Equity Investment Team, our ESG Analysts Team, our Engagement Team, and our Human Resources Department collaborated to design an Engagement campaign on Human Capital Management practices in these Small- and Mid-Sized Companies (SMIDs).
The response rate was very high, at 72% for the first phase and 84% for the second phase! Among our targeted companies, diversity has improved – which can lead to greater innovation and profitability. Staff turnover has risen for most, not too surprising in the post-Covid employment market – but a flag in a few instances.
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”The Small- and Mid-cap companies... understand the importance of human capital, and show genuine willingness to improve disclosure.
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