Talent acquisition and management reporting might become standardized
The Society for Human Resources Management (SHRM) and the American National Standards Institute (ANSI) recently teamed up to propose a standard to “help the investment industry determine the value of human capital and report on it easily.”
Basically, the organizations are proposing a standard format for reporting on the costs associated with talent acquisition, retention, training, and most other human capital initiatives at a company. The standard is billed as an “investor metric” to help investors understand the human capital value a company has.
There is currently strong opposition from the HR Policy Association and the American Staffing Association (of which Yoh is a member), which cite concerns that companies will start raiding talent if such information is available. Another interesting aspect is that the reporting would include contingent or temporary workers as well as outsourced workers. (For more information, I suggest reading the document and public comments.)
While the debate continues, this effort suggests that investors are now focusing more on the talent and human capital aspect of a company’s value.
It makes perfect sense in today’s talent-centric world. Google raids Microsoft. Facebook raids Google. Apple raids Facebook, and so on. With the realization that good talent is hard to find and keep, it’s only natural that investors want a way to measure the talent value of a company.
What does this mean for an HR professional or someone managing talent acquisition? Two very big things, for starters.
- Talent really does matter. The people you hire and have working for you are not only your greatest assets for producing your product or servicing your customers, they could be a crucial and very public measure of the overall value of your company. If that’s not a reason to invest in talent acquisition and retention efforts, I don’t know what is.
- Executives and investors assume that you know where your talent is and how you are getting it. You might have a good handle on all the talent processes within your organization or you might not. But the bottom line is that you could be expected to know at all times. This includes contingent workers and other non-employee types that come in and out of your company.
There are many other things the standard proposes, and it certainly seems like it would be a tremendous amount of work to capture and report on. However, the basic question seems to be, “What’s the cost and value of everything you do related to human capital?” Inquiring minds want to know (mostly the minds that have the money to invest).
I don’t know if the standard will ever be adopted. But if it is, I know that many companies will be glad they centralized their contingent labor through a managed services provider (MSP) or that they use recruitment process outsourcing (RPO) for at least some of their hiring.
If not, the standard is a good wake-up call for many companies to increase their focus on and investment in talent acquisition and management. Even if it doesn’t end up on a report, talent is still the most valuable thing that you have.