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