How can you increase human capital transparency within organisations?

David Simmons tells Bill Banham about human capital disclosures, the Guild of HR Professionals and raising HR standards across the globe.

 

“IF YOU GIVE PEOPLE THE GREATEST ASSERT, WHAT RETURN ARE YOU GETTING FOR THAT ASSET?”

– David Simmons

 

After outlining his organisation HR Analytics LTD, which helps organisations make better decisions through effective human capital and related date analysis, David explains how now, for the very first time, we can measure the ROI of HR.

David explains how it is now possible to assess the extent to which an organisation measures up to the standard. A gap analysis is performed. The auditor will ask if they are up to standard or not.

It is not about the metrics, or the numbers either. It is about organisational change. David explains how his desire is to shift HR from a traditional, transactional, and backward-looking reporting service function, into getting its rightful place in the boardroom, where it can lead on organisational transformation.

The concept of human capital disclosure is very recent. It was predicated upon much of the work that was coming out of the United States Securities Exchange Commission (SEC). This has now made it mandatory for organisations listed on the SEC to disclose publicly about their human capital.

 

“THIS HAS DONE IN A VERY CLEVER WAY. IT IS NOT A TIX-BOCK EXERCISE. RATHER, IN QUITE THE OPPOSITE WAY.”

– David Simmons

 

Instead, it should be disclosed internally within an organisation.

But externally, there should also be a principles-ed approach so any potential client or investor can compare and contrast the organisation and benchmark it to other competitors.

The kinds of things which are encouraged are things like staff turnover, diversity, recruitment, trainee expenditure, cost of hire and so on. The SEC has not made it prescriptive.

 

“DISCLOSURE IS ADVOCATED, IT IS ASPIRATIONAL. IT IS NOT A THRESHOLD.”

– David Simmons

David also explores what this level of transparency means for an organisational brand.

The whole notion of transparency is in the headline these days with regards to salaries. David highlights how there are many cultural differences within this, though. For example, within the UK, it is standard practice for the salary to be part of the job advert.

This is not the case in the US. In this sense, David explains how there needs to be different approaches to transparency on the global level.

Explaining how transparency works in different ways, David also explains how HR has lacked the analytics and statistics to prove what they have been doing for years. He encourages transparency in all business transactions, not just for the private sector, but also for the government and large NGOs.

This is because they are all stacked full of people, meaning that in the end it is all about HR. Just as there is increasing transparency about, for example, ESG, he thinks very soon there will be mandatory transparency about human capital throughout the world.

 

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Amelia Brand
Amelia Brand

Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.