This chapter examines human capital management and disclosure practices among listed companies in Asia. It reviews existing reporting frameworks and assesses the scope and comparability of disclosed workforce-related information. It also documents the reported values of key human capital indicators across regions and sectors, highlighting broad patterns and differences in workforce characteristics. The analysis further explores the relationship between human capital practices and financial performance. The chapter concludes with policy considerations aimed at improving the quality, comparability, and decision-usefulness of human capital disclosure, and supporting corporate resilience and long-term value creation through improved human capital management practices.
Asia Capital Markets Report 2026
Abstract
Human capital is a central driver of value creation and risk management, with investors increasingly relying on workforce-related information to assess corporate performance, risks and prospects. Companies representing 68% of market capitalisation operate in sectors where human capital risks are considered to be financially material.
Human capital disclosure is shaped by multiple frameworks, including GRI, SASB and IFRS S1, but differences in scope, materiality approaches, and metrics may limit comparability and consistency across companies and jurisdictions. There is currently no internationally recognised disclosure framework for investors specifically dedicated to human capital disclosure, although some national authorities, such as Japan, have developed their own frameworks.
Disclosure practices remain uneven across regions. While companies representing 88% of global market capitalisation disclose human capital information, the overall share of reporting companies remains lower in Asia than in Europe and the United States.
There is substantial variation across regions and industries in many key human capital indicators, reflecting differences in workforce composition, sectoral characteristics and regulatory environments. This underscores the importance of contextual and qualitative disclosures alongside quantitative metrics.
Evidence suggests a positive relationship between human capital practices and financial performance. Companies with higher returns on equity tend to exhibit higher average training hours and lower employee turnover rates, a pattern that also holds across companies in Asia and its subregions.
Human capital management covers a broad range of workforce-related practices, policies and outcomes that shape a company’s productivity, resilience and long-term performance. It includes areas such as skills development, employee engagement, workforce mobility and retention, diversity and inclusion, health and safety, and labour and human rights practices. Globally, investors have started to seek relevant information to assess the capabilities and characteristics of a company’s workforce, as well as the policies being employed that may enhance a company’s labour productivity and workforce resilience.
Human capital risks are currently considered the most important type of sustainability-related risk, surpassing climate-related risks (OECD, 2025[1]). Additionally, in an engagement study by the IFRS Foundation, over 150 investor organisations noted that workforce-related information is now considered essential for assessing corporate prospects, estimating expected cash flows, and determining the cost of capital (IFRS Foundation, 2025[2]). Further, in a recent analysis of 544 large European listed companies from 12 different industries, 99% deemed their “Own Workforce” content as material (EFRAG, 2025[3]).
While human capital-related information is incorporated into widely used sustainability reporting frameworks and standards, there is currently no internationally recognised disclosure standard specifically focused on human capital and tailored to investor needs. Several frameworks and standards address human capital disclosure under a variety of objectives, stakeholder priorities and materiality approaches. As a result, they capture human capital through varied metrics, scopes, and levels of prescriptiveness, which may make comparison challenging.
This section provides an overview of the leading disclosure frameworks and standards at the international level, and their key features.
4.2.1. IFRS S1
The IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) is a reporting standard issued and maintained by the International Sustainability Standards Board (ISSB). It establishes a framework for companies to disclose sustainability-related risks and opportunities that could affect their financial standing or prospects (IFRS, 2025[4]). Although human capital is not explicitly addressed as a standalone topic in IFRS S1, companies can still disclose related information and add additional industry‑specific workforce metrics through the SASB Standards. The ISSB is currently assessing whether to develop a standard specifically for human capital (IFRS Foundation, 2026[5]).
4.2.2. Sustainability Accounting Standards Board
The Sustainability Accounting Standards Board (SASB) Standards consist of 77 industry-specific standards focused on financially material sustainability topics for investors (SASB, 2026[6]). In 2024, 3 497 listed companies making up USD 70 trillion in market capitalisation used SASB Standards, with the strongest reporting in the United States, Developed Asia-Pacific excluding the United States, and in Europe (OECD, 2025[1]).
SASB Standards cover five sustainability dimensions, including human capital. However, workforce‑related issues may also appear under other dimensions such as “social capital” and “business model and innovation”. For example, labour issues related to a company’s supply chain may fall under “business model and innovation”. Approximately 17% of all SASB metrics are human capital related, and 71% of industries have at least one associated human capital related metric (IFRS Foundation, 2024[7]).
SASB Standards are structured around financial materiality, identifying sustainability issues that a reasonable investor would consider important in making an investment decision. The standards prioritise investor needs and apply industry‑specific reasoning to include only disclosure topics that would likely be considered financially material. In addition to quantitative metrics, SASB recommends qualitative disclosures on human capital strategies, talent development, workforce planning and organisational culture.
4.2.3. Global Reporting Initiative
The Global Reporting Initiative (GRI) Standards provide detailed, topic-specific guidance on disclosing an organisation’s impacts on the economy, environment, and society, including extensive coverage of human capital issues (GRI, 2026[8]). GRI Standards are the most widely used sustainability disclosure standards and covered over 6 500 listed companies globally, representing 61% of global market capitalisation in 2024. This includes 2 590 companies in Developed Asia-Pacific excluding the US, representing 73% of the region’s market capitalisation, and 944 companies across Emerging and Developing Asia excluding China, making up 43% of the region’s market capitalisation (OECD, 2025[1]).
GRI adopts a double-materiality approach, considering both the financial relevance to the company and the broader impact on stakeholders and society. While GRI Standards include specific guidance for 40 “high impact” sectors, they remain less industry‑specific than SASB Standards, reflecting broader sector definitions and more limited sectoral coverage compared with SASB’s 77 industry‑level standards.
GRI Standards incorporate some human capital elements into general disclosure modules but also offer human capital specific modules. To report in accordance with GRI, companies must comply with the universal standards (GRI 1–3), covering reporting principles, organisational context, and the identification of material topics. Within GRI 2, there are some workforce-related requirements including the total number of employees and workers by working arrangement, gender, workforce turnover, and a breakdown of permanent versus temporary contracts and full-time versus part-time employees.
The modules that provide further guidance on the disclosure of human capital topics include employment (GRI 401), occupational health and safety (GRI 403), training and education (GRI 404), diversity and equal opportunity (GRI 405), non-discrimination (GRI 406), and local communities (GRI 413).
4.2.4. European Sustainability Reporting Standards
The European Sustainability Reporting Standards (ESRS) were developed by the European Financial Reporting Advisory Group (EFRAG) under the mandate of the EU’s Corporate Sustainability Reporting Directive (CSRD). Adherence to ESRS is mandatory for companies listed in the EU that fall within the scope of the CSRD. ESRS follows a double‑materiality approach.
The “Own Workforce” section of ESRS S1 requirements specifically focuses on relevant human capital topics including workforce composition, working conditions, health and safety, training and skills development, diversity and equal treatment, employee engagement and rights, and value chain workers (EFRAG, 2022[9]). Companies must also complement quantitative metrics with corresponding qualitative context and narrative content. This includes policies, strategies, governance structures, and management approaches for workforce and human capital. ESRS also emphasises the disclosure of forward-looking targets, and the tracking of progress towards such targets over time.
4.2.5. Human capital disclosure in Japan
At the national level, similar efforts to align with international sustainability disclosure frameworks have also emerged. In 2025, the Sustainability Standards Board of Japan (SSBJ) issued a set of sustainability disclosure standards to be applied in Japan covering general and climate-related disclosures (SSBJ, 2025[10]). These standards largely mirror existing ISSB Standards and do not introduce human capital-related specificities (SSBJ, 2026[11]).
The Financial Service Agency’s (FSA) Cabinet Office Order on Disclosure of Corporate Affairs requires listed companies to disclose human capital information since the fiscal year ending in March 2023 (FSA, 2018[12]). This requirement covers information on workforce development policies, policies on improving the workplace environment, and associated metrics, targets, and progress towards targets. Qualitative narrative is encouraged to contextualise these metrics. Amendments to the Cabinet Office Order, which require disclosure of a “human capital management strategy aligned with their business strategy,” are introduced to the Annual Securities Reports for the fiscal years ending March 2026 and thereafter.
In 2022, the Cabinet Secretariat, the FSA and the Ministry of Economy, Trade and Industry (METI) published the Guidance for Human Capital Disclosures. A revised version, Strategy-Focused Human Capital Disclosures, was released in March 2026 (FSA, 2026[13]). This publication provides principle-based guidance on the disclosure of human capital information, clearly focusing on strategies and business model, with the goal of supporting investor engagement on listed companies’ human capital management strategy aligned with their business strategy.
The FSA’s Guidance encourages companies to provide contextual explanations for constructive dialogue with investors and, where relevant, disclose human capital information by business segments. This may help convey financially material human capital management strategies information to investors. The Guidance also advocates for business segment-level disclosure, where relevant, as company‑wide data in conglomerates may obscure differences across segments. The FSA’s Guidance is also designed to be consistent with the ISSB standards, and it provides guidance for companies aiming at providing human capital disclosures based on the four pillars in the IFRS S1.
Data from the U.S. Census Bureau’s Business Trends and Outlook Survey show that nearly 20% of US companies reported using AI tools in April 2026, with adoption exceeding 30% in professional services, information services, and finance, and higher usage among larger firms (U.S. Census Bureau, 2026[14]). Across all OECD jurisdictions, generative AI adoption by individuals is around 20% overall, but is significantly higher for individuals in the professional services (37%) and information and communication services (57%) (OECD, 2026[15]).
Recent work has begun to shed light on how companies are deploying AI in finance. A recent OECD study of financial institutions in Italy found that AI is already used for process optimisation like data analysis, output generation, fraud detection, and risk management among others, with strong experimentation efforts underway. These financial institutions also deploy a range of governance and safeguard mechanisms such as human oversight, AI strategies and guidelines, alongside operational risk frameworks. At the same time, many firms report uncertainty about the application of regulatory and supervisory requirements for AI deployment, given the overlay of financial sector-specific policy framework, cross-cutting AI regulation and other applicable rules. Constraints linked to organisational factors, skills and cultural factors, costs and data-related challenges are also widely reported (OECD, 2026[16]).
As AI tools become more widespread, their interaction with human capital presents both risks and opportunities, including potential workforce displacement if adaptation lags, as well as productivity gains when supported by training and investment. Existing sustainability-related disclosure standards and frameworks, however, do not yet consider the growing role of artificial intelligence (AI) in the economy and how it may affect human capital.
This section examines the current market practices in human capital disclosure of listed companies. The analysis draws on a global sample of 47 542 listed companies (27 679 of which are listed in Asia) covering around USD 121 trillion in market capitalisation at the end of 2024. The analysis covers both how often companies report selected human capital metrics and the average values of some of those indicators.
4.3.1. Disclosure levels
Human capital disclosure considers any of the 32 variables (for more information see Table A.A.14 in the Annex A) connected to the larger categories of workforce investment, employee engagement, workforce mobility, diversity and inclusion, health and safety, and labour and compliance practices.
Globally, 22% of listed companies representing 88% of market capitalisation disclose human capital information Figure 4.1. This difference between the number of companies and their market capitalisation share is observed across all regions, suggesting that larger companies are more likely to disclose human capital information. The United States (59% by number of companies, 94% by market capitalisation) and Europe (30%, 93%) show the highest levels of disclosure. This may be due to the binding nature of reporting under SEC Regulation S-K – which includes pay ratio disclosure – in the United States and ESRS in Europe, which require listed companies to disclose material human capital information.
In Asia, 15% of companies representing 80% of market capitalisation disclose human capital information. Above the regional average, 21% of companies (77% of market capitalisation) listed in ASEAN jurisdictions and in China report such information.
Disclosure is widespread at the global level, with slightly lower rates in Asia overall compared to other regions
Note: The global dataset used contains 47 542 listed companies. Of these, 27 629 are in Asia, 4 860 are in ASEAN, 6 534 are in China, 4 128 are in Japan, 5 772 are in South Asia, and 6 331 are in Other Developed Asia. South Asia includes Bangladesh, India, Pakistan, and Sri Lanka. Other Developed Asia includes Chinese Taipei, Hong Kong (China), and Korea. The dataset used also includes 6 460 companies in Europe and 4 587 companies in the United States. This figure may underreport information disclosed by companies in an unstructured format on their websites but not collected or made available by the commercial database provider used for the analysis. This may be the case, for instance, in Japan, where human capital disclosure has been mandatory for all listed companies since the fiscal year ending in March 2023.
Source: OECD Corporate Sustainability dataset; LSEG; see Annex A for details.
A regional and industry breakdown of reporting rates highlights higher disclosure among financials, utilities and technology companies (see Table A.A.16 in the Annex A). The average number of human capital disclosed metrics shows little variation across regions. Companies in the United States report slightly fewer indicators than other regions do (see Table A.A.15 in the Annex A).
Workforce training
Globally, companies that disclose information on workforce training report an average of 35 hours of training per employee annually, rising to 41 hours when weighted by market capitalisation (Figure 4.2). In Asia, companies report an average of 39 hours of training per employee, or 56 hours when measured by market capitalisation. This is higher than the global average and driven in part by China, where employees receive an average of 55 hours of training.
Average training hours vary considerably by region, with Asia above the global average and China leading globally
Note: The global dataset used contains 4 735 listed companies with data on average training hours. Of these, 2 678 are in Asia, 832 are in ASEAN, 879 are in China, 233 are in Japan, 306 are in South Asia, and 427 are in Other Developed Asia. Additionally, 862 are in Europe and 467 are in the United States.
Source: OECD Corporate Sustainability dataset; LSEG; see Annex A for details.
At the industry level, training hours are higher in industries such as basic materials, energy, financials and utilities (see Table A.A.17 in the Annex A).
Employee engagement
Employee engagement is measured by the percentage of employees represented by trade unions or covered by a collective bargaining agreement. This is a component of employee engagement, as trade unions may represent employee interests and engage in dialogue with company leadership.
Globally, about 35% of employees are represented by a trade union or covered by a collective agreement among listed companies that disclose such an information, with the share slightly higher (39%) by market capitalisation (Figure 4.3). The highest values are in China, where employee representation by a trade union is mandatory where a union covering workers in the specific industry exists (OECD, 2025[1]). In Asia as a whole, these figures are 48% by number of companies and 58% by market capitalisation. In South Asia, around 24% of employees (27% by market capitalisation) are represented by a trade union.
Union representation is highest in China and lowest in South Asia and the United States
Note: The global dataset used contains 4 586 listed companies with data on union membership and coverage by collective bargaining agreements. Of these, 1 523 are in Asia, 213 are in ASEAN, 310 are in China, 231 are in Japan, 537 are in South Asia, and 232 are in Other Developed Asia. Additionally, 773 are in Europe and 1 637 are in the United States.
Source: OECD Corporate Sustainability dataset; LSEG; see Annex A for details.
Trade union representation varies significantly across industries, with basic materials and utilities having the highest rates of union representation (see Table A.A.17 in the Annex A).
Women’s representation in the workforce and management
The percentage of women employees and managers provides an indication of gender representation within the company. Higher representation of women in the general workforce and in management roles may indicate that a company is drawing from a broader talent pool, potentially enhancing access to skills and capabilities that support overall workforce quality. There is evidence that gender diversity, particularly among managers, is positively related to company productivity (Criscuolo, 2021[17]).
Globally, women represent an average of 35% of employees among listed companies that disclose such information, and up to 36% on a market-capitalisation weighted basis (Figure 4.4). In Asia, these figures are slightly below the global average at 32% and 34%, by number of companies and by market capitalisation, respectively. ASEAN companies are higher than the global average, with women representing 39% and 42% of the workforce by number of companies and market capitalisation, respectively. Companies in South Asia present much lower shares, with women making up 13% and 17% of the workforce when computed by number of companies and by market capitalisation, respectively.
The advancement gap, defined as the difference between the percentage of women in management positions and the percentage of women in the overall workforce, captures not just the presence of women in the workforce, but whether they progress into senior roles. It provides an indicator of potential barriers to career advancement within companies. An advancement gap of zero indicates parity between women’s representation in management in the broader workforce, while a negative value indicates underrepresentation of women in management relative to their presence in employment.
Globally, the advancement gap is approximately -5 percentage points. The largest gap is observed in Japan, where women’s representation in management is around 17 percentage points lower than their share of the overall workforce. The gap is also particularly pronounced in China and Other Developed Asia. South Asia exhibits the smallest gap in magnitude; however, this may partly reflect a bottoming-out effect, as the region also has the lowest share of women in the workforce overall.
Representation of women in the workforce lags in South Asia, while other regions are closer to the global average
Note: Advancement gap corresponds to the red and purple dots, measured against the right axis. The global dataset used contains 7 551 listed companies with data on the percentage of women employees. Of these, 3 496 are in Asia, 927 are in ASEAN, 1 024 are in China, 405 are in Japan, 688 are in South Asia, and 451 are in Other Developed Asia. Additionally, 1 697 are in Europe and 1 128 are in the United States. Further, a regional breakdown of the percentage of women in management is available in Table A.A.15 in Annex A.
Source: OECD Corporate Sustainability dataset; LSEG; see Annex A for details.
The share of women employees varies significantly across industries. Financials and healthcare have higher percentages of women than other industries do, while the basic materials and energy sectors have the lowest shares of female employees. For female managers, globally, the financial and healthcare sectors have the highest proportions of women in management roles (Table A.A.18).
Health and safety
Workplace-related injuries can result in direct costs to the company, as the company may be required to pay directly for the resultant medical expenses, face production delays, increases in insurance costs, lawsuits or regulatory actions, hiring difficulties, and harm to the company’s wider reputation by its association with dangerous working conditions.
The global injury rate is around 4.6 reported injuries per million hours worked among listed companies that disclose the metric (3.8 when weighted by market capitalisation) (Figure 4.5). In Asia, the rate is lower, at 2 injuries per million hours (1.2 by market capitalisation), and companies in China report an average of 0.7 injuries per million hours (0.5 by market capitalisation).
Differences in industrial composition and reporting practices introduce substantial variation in reported injury rates
Note: The global dataset used contains 4 909 listed companies with data on the injury rate. Of these, 2 233 are in Asia, 597 are in ASEAN, 503 are in China, 200 are in Japan, 587 are in South Asia, and 344 are in Other Developed Asia. Additionally, 1 079 are in Europe and 732 are in the United States.
Source: OECD Corporate Sustainability dataset; LSEG; see Annex A for details.
A company’s health and safety metrics are best interpreted in context, as there is significant variation across industries and jurisdictions, which may reflect different reporting incentives and public sector monitoring of health and safety issues. Different industries are differently exposed to the risk of injuries. The injury rate is higher in consumer cyclicals, consumer non-cyclicals and industrials (Table A.A.19).
Workforce turnover
Employee turnover measures the share of employees leaving a company relative to the size of its workforce over a year. Alongside narrative context and benchmarking against peers, regional, and industry patterns, employee turnover can be an important indicator of the organisational state of a company.
Globally, annual employee turnover is 16% by number of companies and 11% if weighted by market capitalisation (Figure 4.6). In most regions, companies with higher market capitalisation have lower turnover rates. The exception to this pattern is Japan, where turnover is slightly higher in large companies. Research has noted that the low turnover and long tenure of employees in Japan is potentially tied to the strong seniority-wage link and tenure-based tax deductions for retirement allowances (OECD, 2024[18]). In Asia, average turnover is 16% by number of companies and 11% by market capitalisation.
Some regional figures may be influenced by the industrial composition of the national workforce, as well as the legislation or business culture that may favour job security to a greater or smaller extent. Understanding the context and using appropriate benchmarks makes employee turnover a much more useful metric for evaluating the financial prospects and risks of a company. Employee turnover rates are available by industry in Table A.A.20, which shows that consumer cyclicals and real estate have higher turnover rates, while turnover is low in the utilities sector.
Turnover is lowest in Japan and highest in South Asia, with larger companies generally exhibiting lower turnover
Note: The global dataset used contains 5 506 listed companies with data on employee turnover. Of these, 2 811 are in Asia, 766 are in ASEAN, 765 are in China, 260 are in Japan, 599 are in South Asia, and 420 are in Other Developed Asia. Additionally, 1 279 are in Europe and 570 are in the United States.
Source: OECD Corporate Sustainability dataset; LSEG; see Annex A for details.
4.3.2. Disclosure quality of employee turnover statistics
There are some nuances in the way employee turnover is to be calculated and disclosed according to the GRI Standards, SASB Standards and ESRS. In GRI and ESRS reporting, the base value of total employees for the reporting period is left to the company to choose and disclose, though this is often, in practice, the average or end of period number of employees. In SASB Standards, companies are requested to use the average number of employees throughout the year.
GRI Standards and, for some industries, SASB Standards require that reporters provide segmented turnover for employees by age group, gender and region. Depending on the industry, SASB Standards may also require separate figures for involuntary and voluntary turnover. By any of the three standards, companies should provide accompanying context to turnover rates and how they are connected to their financial prospects or business model.
In an original analysis of the disclosure of employee turnover by 20 selected Asian companies of varying financial size, domicile, and industry, nearly all of them refer to GRI Standards.1 Several also mentioned SASB, with no obvious clustering by financial size, country, or industry. Although GRI requires companies to disclose the method or formula used for calculating turnover, not all companies following GRI do so.
Only some of the largest reviewed companies explicitly state the scope of employees used to calculate turnover. These scopes may be restricted to domestic employees or full-time employees only. Companies of all sizes, domiciles, and industries report turnover by some segmentation, typically by gender, age group, region or office location, or by employee function. About a third of examined companies disclosed a breakdown by voluntary and involuntary disclosure. Larger companies tend to disclose voluntary and involuntary metrics more often than smaller companies.
About half of the companies examined disclosed turnover with context that connects recent developments or company practices to the turnover statistic. Although present in smaller companies as well, this is most prevalent amongst larger companies. A small number of typically large companies include a specific statement on the materiality of turnover as it relates to their business prospects.
Research on the relationship between human capital management and financial performance suggests that a company’s unique, internal strategic resources such as the skills and attributes of its workforce, can create a sustained competitive advantage, beyond wider industry patterns and macroeconomic conditions (Barney, 1991[19]). Early empirical evidence demonstrated that “high‑performance work practices,” including selective hiring, incentive compensation, and employee training and engagement, are positively associated with financial outcomes and intermediate workforce measures such as productivity and turnover (Huselid, 1995[20]).
Since then, academic research has found associations between a company’s human capital management practices and the company’s financial performance. A comprehensive literature review of 21 studies on this relationship, conducted by the Oxford Initiative on Rethinking Performance, found a positive and significant relationship between high-quality human capital management practices and financial performance in 18 of those studies (Giamos, 2024[21]). This is further corroborated in the IFRS’ recent literature review, finding that correlations between human capital and financial outcomes are well established, but that poor disclosure quality could still mask such effects and lead to mispricing (IFRS Foundation, 2025[2]).
Investor perspectives reinforce this evidence. A study commissioned by Japan’s FSA found broad investor agreement that human capital materially affects corporate productivity and future cash flows. Investors reported using human capital information to assess both risks and growth opportunities and generally expect such information to be disclosed across industries, accompanied by qualitative context. Participants also expressed concerns that existing disclosure standards do not fully capture decision‑relevant human capital information (Boston Consulting Group, 2025[22]).
4.4.1. Human capital management
Skill-building and capability development can span a wide variety of practices, including continuous training and development, mentoring programmes and career development planning. These efforts can improve productivity and innovation that is difficult for competitors to replicate. Selective hiring can also provide a higher baseline level of productivity with the recruitment of better talent and can reduce costly turnover caused by mismatching. Some examples of associated practices are rigorous recruitment and selection, the consideration of both technical and behavioural competencies, and a focus on high-potential employees (Huselid, 1995[20]; Giamos, 2024[21]).
Performance-based incentives are also strategic components linked to improved financial performance. These initiatives may better align employee incentives with the company’s strategy, increase effort and accountability, and retain talent. This can come from pay-for-performance systems, bonuses tied to outcomes or generally competitive compensation.
Employee participation and empowerment may also improve engagement and motivation. They can also better inform management decisions with information known only to employees. This can come in the form of formalised comment and suggestion systems, trade union or collective bargaining agreement participation, team-based work structures, and a general effort to involve employees in higher-level decision-making. Performance management systems can identify gaps and improve individual performance, as well as align individuals with company-wide strategies. The related practices include regular and frequent performance appraisal, feedback systems, and developmental reviews beyond typical performance evaluations.
A positive work environment can also improve employee retention, which preserves company-specific knowledge. Implementing work-life balance policies, flexible work arrangements, health and safety systems, and strong employee relations can improve the general work environment. Diversity, inclusion, and fairness initiatives and practices can also broaden the talent pool.
Many of these principles are bundled into the concept of “High-Performance Work Systems” (HPWS). Existing evidence seems to indicate that it is necessary to implement a coordinated, wide range of reforms or practices, as standalone human resource management or human capital management policies are far less effective than systemic changes (Huselid, 1995[20]).
Boards play a critical role in overseeing human capital practices and ensuring that material workforce risks and opportunities are considered in strategy setting, risk management, and internal control frameworks. Active board engagement can help integrate human capital considerations into value creation and resilience, rather than treating them as stand‑alone compliance issues. Dialogue between companies, shareholders, employees, and other stakeholders can provide valuable insights into workforce dynamics and expectations, helping companies better assess human capital issues that are material to their business strategy and may need to be reflected in decision‑making and disclosures.
4.4.2. Market analysis
To illustrate the relationship between human capital practices and financial performance, a cross-sectional analysis is performed using data for the fiscal year 2024. Table 4.1 and Table 4.2 show average training hours and employee turnover – among listed companies disclosing such metrics – disaggregated by region and return on equity (ROE) quartile.2 Quartiles are defined within regional, industry‑specific ROE distributions. Versions of these tables using return on assets (ROA) and price-to-earnings instead of ROE are available in the annex, noting that the sample with positive price-to-earnings ratio is relatively small and the upper quartile largely contains tech companies.
Higher average training hours are generally associated with stronger company performance across regions
Note: Average training hours are weighted by market capitalisation. The unweighted averages for training hours by ROE are in Table A.A.20. Versions of this table using ROA and price-to-earnings ratio are available in the same table in Annex A. The sample used to create this table contains 4 663 listed companies, of which 2 666 are in Asia, 831 are in ASEAN, 872 are in China, 233 are in Japan, 305 are in South Asia, 424 are in Other Developed Asia, 853 are in Europe, and 422 are in the United States.
Source: OECD Corporate Sustainability dataset; OECD Capital Market Series dataset; LSEG; see Annex A for details.
Globally, average training hours correlate with financial performance (Table 4.1). While companies in the top ROE quartile provide more training than those in the bottom quartile at the global level, patterns vary across regions. In China, Japan and the United States, higher‑performing firms do not consistently provide more training than lower‑performing firms, and relationships across quartiles are often non‑linear. It should be noted that training hours alone are insufficient to explain differences in company performance fully, and that additional company and context‑specific factors play an important role.
Globally, companies in the highest ROE quartile exhibit markedly lower employee turnover rates than those in the lowest quartile (Table 4.2). This inverse relationship largely holds across regions. While turnover does not decline monotonically across all intermediate quartiles in every region, the overall pattern is more consistent than that observed for training hours.
This provides evidence of a negative relationship between employee turnover and financial performance, as measured by ROE. Higher‑performing firms generally experience lower employee turnover, suggesting that employee retention is closely associated with stronger operational outcomes. This pattern is consistent with the view that weak financial performance may both contribute to higher turnover and be exacerbated by greater workforce instability, including through hiring and training costs.
Companies with the highest returns on equity tend to have lower employee turnover rates
Note: Turnover is weighted by market capitalisation. The unweighted averages for turnover by ROE are in the Annex A, Table A.A.21. Versions of this table using ROA and price-to-earnings-ratio are available in the same table in Annex A. The sample used to create this table contains 5 429 listed companies, of which 2 799 are in Asia, 765 are in ASEAN, 758 are in China, 259 are in Japan, 598 are in South Asia, 418 are in Other Developed Asia, 1 265 are in Europe, and 526 are in the United States.
Source: OECD Corporate Sustainability dataset; OECD Capital Market Series dataset; LSEG; see Annex A for details.
Taken together, the evidence from training hours and turnover suggests a nuanced relationship between human capital and financial performance. While, globally, higher-performing firms tend to invest more in workforce development and experience lower turnover, these relationships are neither uniform nor given. This indicates that human capital initiatives matter not only in extent but in quality and context.
Human capital is a key aspect of a company’s risk and value creation prospects, and the disclosure of such information is key for investment decisions. Over 60% of companies in Asia, by market capitalisation, operate in sectors considered to face financially material human capital-related risks (OECD, 2025[1]). In 2024, companies representing 80% of Asian market capitalisation disclosed human capital information, demonstrating that companies recognise the importance of human capital (Figure 4.1)
Adopting high quality, internationally recognised standards. Although human capital information is already integrated into widely used sustainability reporting standards and frameworks, including GRI and SASB Standards, there is still no internationally recognised standard specifically designed to meet investors’ needs associated with human capital. Japan’s Guidance for Human Capital Disclosures (revised)—Strategy-Focused Human Capital Disclosures is a notable development contributing to strengthening comparability in the country and the usability of disclosures by foreign investors in the absence of an internationally recognised disclosure standard for human capital. Policymakers may consider encouraging companies across Asia to disclose high quality human capital information that enables meaningful comparability across jurisdictions and regions.
Developing requirements or recommendations to expand the disclosure of material human capital metrics in the region. Human capital disclosure rates are relatively high in Europe and the United States and remain above those observed in Asia. Although this difference may be a result of unique economic and financial developments, it may also be due to the obligatory nature of human capital disclosure in some non-Asian jurisdictions. Policymakers in Asia may also consider developing requirements or recommendations to expand the disclosure of material human capital metrics in the region.
Encouraging reporting of a broad set of material metrics and context. Academic research finds well-established relationships between high-quality human capital practices and financial performance. Evidence across global companies shows a positive relationship between ROE and the number of employee training hours, and a negative relationship between ROE and turnover. Although these relationships are neither strictly causal nor linear, they may provide a signal to incorporate into investment decisions. Robust human capital information can also facilitate the monitoring of company-level risks.
The disclosure of human capital information is best utilised when paired with relevant context and narrative. While narrative disclosure may be costly to produce, quantitative human capital metrics are sometimes difficult to interpret in isolation. Without an explanation of a company’s business model, environment, workforce composition, and relevant benchmarks, cross-company comparisons may be misleading or fail to adequately identify the metric’s relationship to the company’s financial prospects. Policymakers may consider encouraging reporting of relevant context and narrative material.
Leveraging human capital disclosure to support broader policy objectives. Policymakers with mandates that extend beyond improving capital market efficiency may also draw on human capital disclosure to monitor and promote long-term economic development and wider policy objectives. Information on corporate policies related to skills development, employee engagement, and performance-oriented compensation can inform public policies aimed at strengthening productivity, innovation, and resilience in the corporate sector.
Standard setters may wish to consider the growing role of AI and its implications for human capital. Survey data indicates rising AI adoption, particularly in professional services, information services and finance, and among larger firms. As AI becomes more widespread, it may create workforce displacement risks where adaptation lags but also support productivity gains when accompanied by training and investment
References
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← 1. To select 20 companies for detailed analysis of employee turnover disclosure, a subsample of Asian companies that reported turnover in 2024 is identified, sorted by market capitalisation, and the top five companies from each quartile are selected.
← 2. Return on equity (ROE) is computed as the net income of a company divided by its equity. Conceptually, this corresponds to a company’s effectiveness in utilising funds invested by the shareholders to generate profit. A higher ROE usually means better efficiency in using equity capital and is a key metric for investors.