Human Capital Reporting – Are you Ready?
What would your organization do without these “Core” Leaders that are the backbone and frontline of your success or failure, and what do they want/need from you?
So, what do these Core Leaders want in a workplace?
Here are some things Core Leaders need from you:
- An engaging and collaborative environment
- Flexibility and diversity
- A positive culture that helps them bring their best self to work
- A place where they feel like their work is creating a positive impact
- Transparency from top leadership.
Turns out that the new Human Capital Reporting requirements aren’t just the latest SEC regulation … it could actually be the key to successfully analyzing the most impactful ways to keep your Core Leaders.
2021 has brought the new Human Capital Reporting requirement, and for most companies, this is the first year they will be formally reporting this data.
I first wrote about this topic in October 2020. Now that it becomes real in 2021, let’s dig a bit deeper.
Assuming your company is like many today, your value comes from your workforce, and this is your opportunity to tell the story of your human capital data as a point of overall evaluation and differentiation.
Chances are you have some human capital metrics you have been gathering internally and reporting on to your leadership. Those metrics are a great place to start since you have already defined the metric, know what data to collect, and how often to collect and report it.
Ask yourself: Can this metric be used for comparability in our industry, or is this metric a differentiator with your competitors?
You also should be thinking about what other Human Capital metrics are critical for your business.
Ask yourself: Are there some metrics you have been wanting to start reporting but haven’t had the support you needed to define and collect the data?
Now is a great time to make your business case for adding these metrics.
If you don’t have many current Human Capital Management (HCM) metrics, or you want to understand what metrics you should be considering, there is help available.
Overall, there are the following 11 Human Capital Areas to be considering.
- Compliance and Ethics
- Organizational culture
- Organizational health: safety and well being
- Recruitment, mobility, and turnover
- Skills and capabilities
- Succession planning
- Workforce availability
Under each area, there are additional metrics.
As examples, in the core area of:
- Recruitment, mobility and turnover: There are 14 suggested metrics – including total turnover, voluntary turnover, % of critical positions filled internally, and time to fill vacant positions.
- Diversity: There are 2 metrics – workforce diversity and leadership team diversity.
To find all suggested metrics, check out the ISO 30414 from Human Resource Management.
As Annual Reports start to be filed in March for companies with a calendar year end, it will be enlightening to see the range of human capital metrics reported. As a Human Capital professional, make sure you know how to read a 10-K and make a point to review relevant portions of the 10-K for competitors and companies you admire. This will be another great resource to spark ideas for your HC measurement plan.
This requirement for Human Capital reporting will cause a rethinking of how organizational value should be understood and evaluated.
This is year 1, so make a plan now as to how you will work to progress your metrics next year and for the next 3 years. And, watch for what investors are paying attention to.
One final suggestion: Challenge yourself to identity metrics that may differentiate your organization.
The implementation of Human Capital Metrics has the ability to really change the perception of your company.
This is the time for our professional voices to be heard – to speak up, provide value, and lead the HCM reporting efforts.