Rising expectations for HR — especially regarding transparency in employee management — are prompting more boards to look deeper into people operations, an Oct. 3 report from The Conference Board said.
With more intense SEC disclosure rules expected (though they’ve not yet come to fruition), investors may be looking for greater board engagement in HR management and may desire more HR-relevant data, The Conference Board said. That means HR leaders will need to focus on building a data-driven enterprise and improving storytelling for multiple stakeholders — employees and investors alike.
Importantly, organizations driven by transparency may find it easier to retain talent, even amid the risks inherent in it. Transparent employers tend to experience higher employee retention, greater customer loyalty and more investor interest — and be better prepared for incoming SEC attention to such matters, according to the report.
The Conference Board provided a number of steps HR departments can follow to build a solid strategy, including:
- Gaining buy-in from leadership.
- Collecting, analyzing and benchmarking data.
- Creating and then audience-testing the story to be told.
The Conference Board also recommended HR departments form a committee to organize the data needed to form such a strategy, especially since high volumes of quality data would be required to find proper insights.
“It’s nice to say we’ve got a human capital management strategy that aligns with our business strategy, but we’ve got to make it specific, concrete, and compelling,” Paul Washington, executive director, The Conference Board ESG Center, said in a statement. “A strategy leveraged on analytics can demonstrate the returns on each dollar invested in talent acquisition, learning, mobility, remuneration, and engagement.”
States and localities have put pressure on specific transparency initiatives, particularly around pay, meaning employers may need to prepare for these expectations outside of SEC rulemaking.
And HR leaders should be careful to ensure narratives reflect the actual experience of employees, the report noted — or else workers “will be quick to use social media platforms to point out discrepancies which may result in reputational risk.”