These numbers are essential, but don’t tell the whole story. Spending on employees, including training and healthcare benefits, often gets lumped together with other costs. At Comgest, we gauge how much companies are investing in their workforce. We see human capital expenditure (“Human CapEx”), the knowledge and skills people acquire throughout their lives, as a competitive edge for companies.

Post pandemic, companies have focused more on their softer benefits, from free parking to ping-pong tables, to attract and retain talent. Many of these efforts aim to boost low employee engagement and stem the rise of so-called “quiet quitting”.

Beyond the cold brew

Free cold brew coffee is nice, but Comgest prioritises more substantial employee engagement strategies. We want to understand the steps a company is taking to ensure their workforce drives sustainable earnings growth. During our investment research process, we analyse employee wage structures, benefits, training programmes and promotion opportunities to ascertain whether a company meets our rigorous quality growth standards.

As we see it, companies that invest in their employees are more likely to attract, retain and develop workforces capable of delivering enduring financial performance. Capital expenditure (“CapEx”) on new buildings, equipment and storage facilities can result in greater productivity and performance. In our opinion, investments in Human CapEx can achieve similar outcomes by motivating employees, increasing productivity, reducing staff turnover and strengthening a company’s reputation.

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