Weekly Wrap: SHRM Forced to Back Off on New Human Capital Standard

From the HR blog at TLNT.
From the HR blog at TLNT.

I’m not always a big fan of SHRM — particularly how SHRM’s Board of Directors has chosen to operate — but this week, I think SHRM got big footed and forced to back off something that might have ultimately been a good thing.

In case you missed it, the American Staffing Association (ASA) and a number of other related organizations are crowing about forcing the Society for Human Resource Management to back off an effort they were leading to create standards around the reporting of HR metrics to investors.

According to a story on SHRM’s website, “This standard was to consist of a series of metrics intended to show the value of human capital in a manner that would be compelling to investors in publicly traded companies” according to Lee Webster, HR standards director for the SHRM.

Not sufficient support to proceed

“However, feedback from stakeholders in the business community during the public review and comment period prompted the task force that drafted the proposal to withdraw it from the American National Standards Institute (ANSI) standards-setting process, Webster said. “It became clear that there wasn’t sufficient support from the business community to proceed with this effort. After seriously considering all relevant views, the task force decided to discontinue work.”

Here’s what the ASA had to say about this in a story this week on their website:

At the behest of the American Staffing Association, HR Policy Association, U.S. Chamber of Commerce, and other business groups, as well as Fortune 500 companies, the Society for Human Resource Management has withdrawn its proposed American National Standards Institute guidelines that would have required publicly traded companies to disclose confidential human resource metrics, including expenses incurred in connection with the use of temporary workers. According to SHRM, the metrics were designed to provide human resource information to investors to assist them in their investment decisions.

In written correspondence opposing the proposed metrics, ASA and others stressed the lack of a genuine need or any sort of expressed desire on the part of the investment community for human resources metrics standards, and noted that the metrics would result in publicly traded companies having to divulge trade secrets and other competitive information by virtue of the disclosure of otherwise confidential human resource information.

ASA and its allies also stressed that the metrics, which were largely drafted by human resource consultants, would prove meaningless since investors would not have any benchmarks with which to interpret and compare them, and that the standards were outside the boundary of the kind of work that SHRM should be doing. “Instead of supporting human resource professionals and the businesses that employ them, the standards would, in actuality, be harmful to their companies.”

Big companies find standards a big hassle

If you are one of those people (as I am) who thinks that better HR metrics would actually be a good thing, well, ASA and all of its buddies just big footed you, too.

The coalition that came together to fight this proposed HR standard is largely made up of big companies. I’m not surprised that Fortune 500 companies and the HR Policy Association is against it, because the bigger the company, the bigger the hassle it is to compile this kind of data.

I’m also not surprised that there is a “lack of a genuine need or any sort of expressed desire on the part of the investment community for human resources metrics standards,” as the American Staffing Association puts it, because trying to get two members of the investment community to agree on anything is like trying to get two economists to agree. It just doesn’t happen.

And, the notion that “the metrics would result in publicly traded companies having to divulge trade secrets and other competitive information by virtue of the disclosure of otherwise confidential human resource information,” is laughable on its face. If we used that standard to decide what kind of information businesses were required to disclose, nothing would EVER be disclosed, because businesses don’t ever want to disclose anything at all.

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Yes, the American business community is not exactly a group that is clamoring for more transparency and insight into their business practices.

Like dealing with a grizzly bear

I guess what surprised me the most about all of this was how SHRM was actually forced to back off their support for this new standard, and if you know much of anything about SHRM, you know that just doesn’t happen very often. SHRM, as a national organization, is stubborn, bullheaded, and not easily forced to fold their tent and back away from something they want to do.

But as one person knowledgeable about the work on this HR metric standard told me about the coalition going up against SHRM on this, “It was like a grizzly bear walking into your picnic. No one is saying the grizzly bear is right to take your lunch, but the smart thing was to walk away.”

The rumbles I hear are that this fight over the proposed HR metric are not over just yet, despite SHRM’s action this week, and I think that is probably a good thing. Despite the hassle that something like this might cause businesses and organizations, a metric that shows the value of human capital — the single largest expenditure for most American businesses — is probably a good thing.

Again, I’m not a big fan of how SHRM operates sometimes, but this is one time where I am on their side. This debate over a proposed human capital metric deserves to continue.

Of course, there’s a lot more than the squabbling over a national HR standard in the news this week. Here are some HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of talent management. I do it so you don’t have to.

  • Are CFOs dissing HR again? HR people tend to bristle at the notion of having their function report to the CFO instead of, in Jack Welch fashion, the CEO. And that’s why this story in CFO magazine headlined Don’t Let HR Tell You Who to Hire is so interesting, because it rekindles that debate once again.
  • Tech boom fueling broader job growth in San Francisco. Remember the old adage that “a rising tide lifts all boats?” Well, the tech boom in Northern California is driving all sorts of hiring in all sorts of companies. According to the San Francisco Chronicle, “Nerds are no longer the only ones benefiting from the innovation boom. Having left the heavy lifting to technology companies until early this year, San Francisco’s non-tech employers are playing a growing role in the city’s labor recovery. Positions in everything from retail to construction to hospitality now comprise about 75 percent of the city’s job growth, helping the city add jobs at among the fastest rates in the nation and reduce its unemployment rate to 6.5 percent.”
  • Use it or lose it? Lots of workers losing vacation days. Miami Herald workplace columnist Cindy Krischer Goodman points to studies that show that American workers aren’t able to use all of their vacation time and, unless they live in California, are losing them once and for all. ” As 2012 draws to a close, the question looms: Are you going to accidentally forfeit vacation days? For an increasing number of American workers, the answer is yes. … A survey by Harris Interactive found that by the end of 2012, Americans will leave an average of 9.2 days of vacation unused, up from 6.2 days last year. It also found profits per employee are at a 10-year high, mostly because workers are cramming in more hours.”
  • Best and worst holiday jobs. The Houston Chronicle reported this week on the best and worst holiday jobs, according to CareerCast. The best? How about Santa, retail sales (hard to believe) and package deliverer (also hard to believe). The worst? Playing one of Santa Elf’s (remember Will Ferrell?), Christmas tree lot attendant (yuck), and airport worker (double yuck). As the Chronicle story noted, “Pay is important .. (but) other issues also play into the ratings, such as the amount of stooping, crawling and heavy lifting, stressful public contact and exposure to toxic fumes you’re likely to face with specific holiday positions.”

John Hollon is Editor-at-Large at ERE Media and was the founding Editor of TLNT.com. A longtime newspaper, magazine, and business journal editor, John has deep roots in the talent management space. He's the former Editor of Workforce Management magazine and workforce.com, served as Editor of RecruitingDaily, and was Vice President for Content at HR technology firm Checkster. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices, including for the popular Fistful of Talent blog. Contact him at johnhollon@ere.net, connect with him on LinkedIn, or follow him on Twitter @johnhollon.


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