85% of company costs is tied up to people costs, so it is imperative for shareholders to understand how organisations allocate and manage people. With SECs recently introduced new disclosure requirements, it is clear that people data and people analytics will be grabbing the attention of analysts and will influence shareholders investment decision making. These changes and multiple other reporting requirements coming around the globe will help investors to be more informed on the most important aspect of the business - i.e. how business ensure they have the right workforce to succeed in the market today and tomorrow. I am convinced to assume that these disclosures will definitely influence share price in the future!
The U.S. Securities and Exchange Commission (SEC) published rules and guidelines on human capital reporting in August 2020. Reporting mere 'number of employees' will not be enough for publicly traded companies anymore. There are three key areas SEC guidelines give direction on - 1) Talent Attraction 2) Talent Development 3) Retention. Organisations can really disclose the right data and gain long term value if they carefully report on people data and win hearts of investors!
The definition of 'human capital' and disclosure requirement is open for interpretation at the moment and will evolve in the coming years. In order to prepare for the new disclosure and more to come, the suggestion is to follow ISO 30414:2018 HCM reporting guidelines. Organisation need to consider this as an opportunity to create long term value rather than a barrier. Below are some of the key metrics organisation can start thinking about to report on in the future. It is important to have right quality data to report externally, so HR professionals - get your data right! - NOW! It will be as valuable as financial and sales data if not more!
- Workforce Metrics
- Total Number of Employees
- Number of full time/part time
- Number of permanent, temporary, contract employees
- Ratio of male and female in leadership and total workforce
- Number of nationality in leadership and total workforce
- Demographics & DEI - Age, ethnicity diversity, sexual orientation, disability, veteran split
- Absence rate
- Talent Attraction Metrics
- Time to Fill
- Time to Fill Critical Positions
- Percentage of positions filled internally
- Percentage of critical positions filled internally
- Number of new hires
- New hire % to total workforce
- Talent Development Metrics
- Development & Training costs
- % of completed compliance & ethics training
- Total training hours
- Number of employees in performance management program
- Number of employees participating in wellbeing programs
- Succession Planning - bench strength for critical positions
- Networking and D&I program participation
- Global mobility program participation
- Compensation Metrics
- Total workforce costs
- Benefits
- Bonus coverage and proportion
- Minimum wages - Median and Mean salary for leadership & total workforce
- Collective bargaining
- Pay equality
- Employee participation in share program
- Safety
- Number of critical work incidents
- Number of injuries/deaths
- Engagement Scores
- Employee Feedback score
- Leadership trust score
- Retention Metrics
- Turnover for critical position
- Turnover for leadership and total workforce
Along with the new disclosure, it will be important to disclose the quality of data to ensure the data reported is trustable. Organisation need to start thinking about driving strong data governance program to ensure they have the right system capabilities and meet all the required data quality audit requirements. The future of people data and human capital reporting will evolve!
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Good post. You're right in mentioning that the workforce has had to go online because of the global pandemic. That's why businesses need to invest in HR application software. At https://hrapp.in/ , we will help you manage your team and keep track of everything they do so you can stay on top of their progress without being overwhelmed by paperwork.
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