Status update on SHRM-ANSI HC IM standard

This is just a very quick briefing on the forthcoming ANSI standard on human capital metrics for investors

Long Term Intent:  improve the functioning of the economy by giving investors better insight into human capital…which of course leads to better management of human capital and better allocation of financial capital

Current Status: The standard has just finished the first round of public consultation; there was a lot of feedback and it will take some time to process and incorporate all of the improvements that have been suggested. After that there will be a second round of public consultation to refine it further.

What the standard proposes organizations should report on

1. Spending on human capital
2. Ability to retain talent
3. Leadership depth
4. Leadership quality
5. Employee engagement
6. Human capital discussion & analysis

What else you should know:

The Standard is meant as a starting point, not the end point
• It covers some important human capital factors, not all the important ones.
• It provides data, not conclusions.
• It will evolve over time.
• Individual organizations will use the Standard “plus additional data.”

The Standard is part of a bigger movement to improve non-financial reporting
• Many people have long been working on non-financial reporting.
• The Human Capital Standard is intended to fold into these broader efforts.
• The momentum of this broad movement will make it hard to ignore the Standard.

The Standard is not just for investors, nor will work start with them.
• The information outlined in the Standard will not, in most cases, be reported immediately to investors. First the HR department will need a handle on the data, then the executive team and board. After a few years organizations should be ready to share the data.

The Standard is not compulsory.
• It is a persuasive and practical guide for better reporting; not a legal requirement.
• Organizations should use it because it is helpful for boards and investors or because investors are asking for it.

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