CXR Recommends: new SEC Guidelines on Human Capital

The SEC just announced guidelines effective November 9 for publicly traded companies to disclose various human capital details starting with their next quarterly or annual financial releases. Even if you’re not publicly traded, I’d recommend that you pay attention here – there’s some opportunity to get in front of this and be a leader in this space AND the attraction and brand space among your competitors.

The SEC just mandated human capital disclosure: What does this mean for you?

Here’s an excerpt from the article from a recent Chief Learning Officer piece: “The 10 metrics for all-sized organizations include total workforce cost, human capital ROI, EBIT per employee, turnover rate, total development and training cost, and percentage of employees who have completed compliance training, among others. The 13 additional metrics for larger organizations include diversity by age, gender and disability, leadership diversity, leadership trust, time to fill vacant positions and time to fill critical vacant positions, and percentage of positions filled internally and percentage of critical positions filled internally. ISO also recommends other metrics for L&D which could be disclosed publicly, such as percentage of employees who receive training, percentage of leaders who receive training, percentage of leaders who receive leadership development and average hours of training per year.”

About 1/2 way thru the article you’ll see what TA will now need to disclose. Read the article, pass it on to your Talent Management counterpart and up to your CHRO. You’ll be glad you did.

Worth noting… This may also be the perfect opportunity for the CXR Foundation to come together and be included in the exciting work on new standards or guidelines around the collection, reporting, guidelines/standards, etc. in this area. The time for some real work on universal standards on some of this is long overdue.

CXR Members are invited to join us on December 16th for a discussion on the impacts of these new guidelines. We’ll be joined by Solange Charas, PhD., Founder and CEO of HCMoneyball. Register here.

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Talent Community Forums New SEC Mandate – worth talking about!

  • New SEC Mandate – worth talking about!

     Chris Hoyt updated 7 months ago 5 Members · 6 Posts
  • Chris Hoyt

    Member
    November 21, 2020 at 1:00 pm
    2327 Points

    In case you missed the CXR Recommends article (https://cxr.works/cxr-recommends-new-sec-guidelines-on-human-capital) I’m dropping it here and hoping we can catch up on this.

    I’m really curious what some of you are thinking the downstream impact to companies could/should be.

    Worth noting…

    This is a really exciting new world where the SVPHR or CHRO is going to become much more of an equal to the CFO, and where L&D and HR metrics become just as important as financial measures. Moving forward, quarterly and annual financial releases will spend more and more time sharing, describing and commenting on human capital metrics. Benchmarking organizations will be close behind to gather all this public information and compare companies, putting incredible pressure on poor performers from a human capital point of view.

    CXR Recommends: new SEC Guidelines on Human Capital

    0
  • Cathy Henesey

    Member
    November 22, 2020 at 11:19 am
    90 Points

    Really interesting article. I do agree it is a matter of time before it will be expected for all companies. There is a real opportunity to assist in developing standard metrics and set standards on how to present them in a uniform way. I would be curious if our public companies in the community are starting to prepare these numbers?

    +1
  • Celeste Luzadder

    Member
    November 22, 2020 at 1:27 pm
    31 Points

    I agree with @cathy-henesey that there is an opportunity to set the standards on how companies are reporting out on these metrics. My organization, still privately held, is working on building out the foundation and muscle for our People Analytics team and this article provides clarity on what we should be focusing on. I would love to see how other organizations are reporting out this data and how frequently they are looking at it with their leadership team. I’d also love to know if this is causing CHRO’s to re-think their budget and people investments going forward. Personally, I’m excited to see the increased focus on these areas of talent development and DE&I and just reinforces it’s importance to the C Team.

    +1
  • Tom Young

    Member
    November 23, 2020 at 8:54 am
    21 Points

    Agree with others who have replied that the opportunity to set standards is welcome and I’m encouraged by SEC comments that there is unlikely to be a universal standard…”We also are not adopting a definition of the term “human capital” …because this term may evolve over time and may be defined by different companies in ways that are industry specific. This approach is consistent with the view expressed by a number of commenters that noted that there are many definitions of human capital and that the concept, while generally well understood, is often tailored to the circumstances and objectives of individual companies. Final Rule: Modernization of Regulation S-K Items 101, 103, and 105″

    Since clearly this data will be used to differentiate companies by prospective employees, by existing employees, used in best place to work rankings, used to assess and assign investment ratings and so on, the potential impact is immense. Of particular note will be the necessary controls and procedures that will need to be implemented around the quality of one’s data – sure we all try to get our data as accurate as possible with some regulatory pressure on select data points, but I’d suggest many of our data points going forward that we only share internally or anonymously for benchmarking, will require much greater discipline and likely greater investment to ensure accuracy. Ultimately a good thing, but the transition could be painful.

    +1
  • Dan Black

    Member
    November 23, 2020 at 10:41 am
    29 Points

    Excited about what this means for Talent Leaders and the impact on our profession in general. For as long as I can remember, we’ve been making the case that Talent needs to be at the table in all stages of the business life cycle, and those of us who have been at it for along time know it’s often been an uphill battle. This new development fits squarely into the “what gets measured gets done” category, and I think it will further elevate the critical role Talent that plays to internal and external stakeholders alike. I agree that it will take time to get to meaningful benchmarking, but Rome – just like the SEC reporting process- wasn’t built in a day. Looking forward to further discussing this in the months to come.

    +1
  • Chris Hoyt

    Member
    November 23, 2020 at 11:10 am
    2327 Points

    As an FYI, the CXR Foundation met with HR.com early this morning and is already beginning a project to take the lead on establishing the methodologies and deliveries for companies both required to, and interested in, reporting the new mandates.

    If you’re interested in being part of that initiative or have someone on your team you want to be included, now’s the time to raise your hand.

    We’ve already started an outreach to ISO, Harvard Law School Corp Governance Advisory Board, Center for Talent Reporting, select CareerXroads leaders, and more.

    +2
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Chris Hoyt

Chris Hoyt

A veteran of recruiting and HR, Hoyt is a sought-after speaker with presentations including national conferences with SHRM, LinkedIn, HR Technology and others in the USA as well as iRecruit, Australasian Talent Conference and more abroad. Chris has been promoting and leading full scale and enterprise-wide integrations of social media and mobile marketing within workforce strategies for his entire career. His expertise and passion for interactive/social recruiting, candidate experience, and both national and international recruiting strategies are all areas that Hoyt now leverages as co-owner and President at CareerXroads, a Recruiting/Staffing consulting and think tank organization that works with corporate leaders from around the world to break out of traditional recruitment practices and push the envelope in an effort to win the ongoing war for top talent.
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