Institutional investors to SEC: More reporting on HR data is needed
- A group of 25 institutional investors is petitioning the Security and Exchange Commission (SEC) to mandate more reporting on employees by public companies, CFO reports. The Human Capital Management Coalition (HCMC) is asking SEC to require more reporting on practices, policies and performance in order to track the connection between human capital data and stock market performance.
- According to CFO, the HCMC is requesting more reporting on among other topics such as workforce demographics, stability, composition, skills and capabilities, culture and empowerment, and health and safety. Currently, public companies are required to report on only staff size and executive compensation.
- In its 29-page petition, the HCMC cites academic studies showing that improved human capital management correlates with profitability, higher shareholder returns and generally better company performance when measured against benchmarks.
If SEC approves the petition, HR managers must provide most of the human capital data. If companies are already capturing the data for internal use, such as annual reports or marketing campaigns, the reporting request might not be particularly burdensome. But that will depend on the complexity of the reporting process.
A Mercer study found that 80% of employers are struggling with reporting CEO-employee pay ratios already, and continued drama around the new EEO-1 report shows how quickly burdensome some additions can become.
If anything, the calls for such data point to the growing role of HR in developing business strategy. In other words: more execs recognize HR's key seat at the table.
Workforce demographic data can help companies assess their hiring and recruitment strategies. Workforce stability can address retention, while skills and capabilities help measure productivity and competitiveness. Companies can use culture and empowerment data to bolster employee engagement, and health and safety data can be used to improve a wellness program or pinpoint workplace hazards.