Companies can now track how happy a work force is and make improvements to boost performance, says a new PricewaterhouseCoopers report.

The report shows how companies can plot levels of engagement for an entire work force by looking at data relating to training hours per full-time employee, resignation levels, absence rates, employee attitudes, and performance related pay and incidence of grievance. These range from the high levels of engagement that produce positive behaviours - such as flexibility and innovation - to the other end of the scale where companies experience resignations, absence, pilfering, theft, oppositional solidarity, even sabotage.

The report Managing People in a Changing World – published every two years - also looks in detail at financial performance, productivity, outsourcing, leadership, innovation, talent management, diversity, work/life balance and the growing concept of work place wellness, all through the lens of PricewaterhouseCoopers extensive human capital database, Saratoga.

It also charts the rise of a new kind of offshoring - knowledge process offshoring - where traditionally sacrosanct knowledge or judgement services such as research and sales and marketing are run from other countries. This market globally is predicted to grow to $16.7 billion by 2010-2011, implying an annual growth rate of 39% and employing some 390,000 professionals by March 2011. Here, countries such as India, China, Russia, Poland, Hungary and republics from the former Soviet Union provide high levels of skills at comparatively low cost for many western economies experiencing skills gaps, says Pricewaterhouse Coopers.

A new concept of ‘connected sourcing’ is also emerging, it reveals. This sees organisations increasingly focusing on what they do best and then orchestrating a portfolio of relationships for the rest. This requires a new approach and highly developed levels of collaboration, transparency, trust and relationship management.

A further development is found in the area of talent management. The traditional focus on high performers and ‘high flyers’ is shifting to include ‘pivotal employees’. These are segments of the workforce that are expected to create value and determine the success of the organisation. They can range from the receptionist to the sales director and the contribution of these core people has a disproportionate impact on determining both the success of an organisation and its sustainability.

Richard Phelps, partner, PricewaterhouseCoopers, said: “As the value of choosing the right human capital policies is increasingly recognised by business leaders, we are seeing a greater demand for evidence based human capital metrics. Using these, companies are now able to ascertain how they are performing in previously uncharted areas such as succession planning, innovation and talent management as well as using the ‘harder’ metrics such as return on investment per worker to determine overall business performance.

“It is an exciting time in this area. More and more companies are working hard to be perceived as responsible employers, to build attractive employer brands and fulfil their reputation as a responsible company. Human capital metrics help them to throw their arms around all of this.”