2020-01-20 HR Examiner article neil mccormick human capital reporting photo img cc0 via pexels stock photo img fruits on glass top display counter 2449665 544x408px.jpg

“While 30414 may not be perfect in everyone’s eyes, it certainly does give organizations a consistent data set, definition, formula, and purpose on which to base measurement. This level of consistency means, for the first time, meaningful comparative information can be analyzed by industry sector, organization size, country, and location to name a few of the ways to ‘slice and dice’ data.”
- Neil McCormick

We all know around the world, regulators are considering the requirements for Human Capital Reporting. Many investors welcome such a move, and many organizations groan and feel this another compliance burden. To only look through the lens of compliance is a huge mistake.

The only existing International Human Capital Reporting Standard is ISO DIS 30414:2018 Human Resource Management – Guidelines for human capital reporting for internal and external stakeholders (30414).

Much is written about and discussed on 30414. Indeed, I’ve been one of the contributors to a previous HR Examiner article on The Global Movement for Human Resources Standards. If you are not familiar with the discussions on the Standard, the LinkedIn group #iso30414 is a good source of information.

The Standard is being enhanced further with the development of Technical Specifications (TS) for each of the metrics in the Standard. Each TS will document the purpose of the metric, the precise formula to use, how the metric should be used and, by whom. Each TS also includes contextural factors and predictive factors to consider when reporting. ISO TC 260 Working Group 2 Metrics is delivering these TS’s.

What does all of this mean? Well, it means we will have uniformity of formula and methods of measurement for each of the metrics in 30414.

So, rather than looking at Human Capital Reporting as a burden and a compliance issue, organizations can gain incredible value in using 30414. It is possible to continuously gain greater insight and comparative information about an organization. The result we all would enjoy is improved productivity and delivery of organizational objectives.

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Neil McCormick Founding Member HRExaminer Editorial Advisory Board

I’m often startled by the number of workforce reports, measures, and spreadsheets presented at various levels in organizations. Now data and metrics are presented in dashboards for ease of viewing.

One of the big problems with this, though, is the variation of formula, timing, and the validity of the data source. Most reports are typical of a snapshot in time and don’t explain the context behind the numbers or activities. The other big issue with Human Capital Reporting is it is continually internally focused.

While 30414 may not be perfect in everyone’s eyes, it certainly does give organizations a consistent data set, definition, formula, and purpose on which to base measurement. This level of consistency means, for the first time, meaningful comparative information can be analyzed by industry sector, organization size, country, and location to name a few of the ways to “slice and dice” data.

Services are now offered to organizations to compare their crucial metrics with other organizations of interest. For example, a mid-sized company in Texas may anonymously enter their 30414 parameters and seek comparisons against other similar organizations in their region or country. They may want to compare themselves to larger organizations in their industry sector.

You can’t manage and improve what you can’t compare whether that be an internal comparison over time or external comparison of like organizations.

For instance, an organization may believe it is performing well as profits are good and growth is steady. However, in comparison, they may discover that the Industry turnover for their sector sits at 6.5% while theirs is 10%. This simple comparison should trigger further investigation. It may well prove an excellent source of reduced costs, improve productivity, and improved engagement with workers.

There are companies such as Human Capital Institute (HCI) already offering these services. They typically have a wealth of anonymous data to compare.

The big difference since the release of 30414 is that we finally have a defined set of criteria with precise formula and timing so we can be sure we are comparing “apples with apples.”



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