Metrics, Schmetrics
The debate about standardization of human capital analytics is kicking into high gear as SHRM forges ahead with its initiative
to standardize HR and Human Capital metrics and critics – including the
lobbying group HR Policy Association (HRPA) – takes pot shots at the
plan, which includes the development of a template with which companies
would report the information to shareholders. The ball on this
initiative began rolling back in 2009 when American National Standards
Institute (ANSI) designated SHRM as a Standards Developing Organization
(SDO). Critics say this is a cynical move on SHRM’s part to justify its
existence and that standardization could wind up constituting a
Sarbanes-Oxley-esque reporting nightmare.
i4cp’s Cynical CEO argued back in May of this year that SHRM is over-reaching, big-time. “Here’s a suggestion for SHRM and my HR department: before attempting to show your value to investors, how about you successfully prove to me that you can impact the bottom line? Heck, I’ll make it even easier - just prove to me that you understand our business.” While we think metrics are great, they also highlight the fact that for most organizations, HR remains a major cost center rather than a profit-generating function. And the idea of yet another anvil over our heads in terms of more reporting requirements makes us less than giddy.
HR blogger Kris Dunn wrote this week that in “creating a platform that threatens to standardize, and therefore require, the collection of data and reporting of metrics along the lines of financial metrics to Wall Street, there's the predictable ‘give me freedom or give me death’ call related to an implied threat that these metrics could be included in future regulatory burdens.”
HRPA, whose membership includes the senior HR leaders at more than 300 of the largest companies in the U.S. agrees, pointing out that such standardization and reporting requirements would in effect bury public companies already burdened with truckloads of Sarbanes-Oxley paperwork. And requiring companies to make public such information as the resources invested in hiring and training will have other consequences, such as placing them at a competitive disadvantage.
While critics such as Dunn question whether or not SHRM is even the right organization to lead such an initiative, there is acknowledgement that those who pine for standardization can’t have their cake and eat it too. “Seems like folks like me should either get involved and help determine the solution or stop complaining like the HRPA is doing,” Dunn wrote. Standardization may make sense in theory, but we need to be careful what we ask for. Moreover, we need to first get our priorities straight. In the words of the Cynical CEO, “I want to put our best foot forward when engaging investors. I don't want to scare them away by showing that HR is a money pit.”
i4cp’s Cynical CEO argued back in May of this year that SHRM is over-reaching, big-time. “Here’s a suggestion for SHRM and my HR department: before attempting to show your value to investors, how about you successfully prove to me that you can impact the bottom line? Heck, I’ll make it even easier - just prove to me that you understand our business.” While we think metrics are great, they also highlight the fact that for most organizations, HR remains a major cost center rather than a profit-generating function. And the idea of yet another anvil over our heads in terms of more reporting requirements makes us less than giddy.
HR blogger Kris Dunn wrote this week that in “creating a platform that threatens to standardize, and therefore require, the collection of data and reporting of metrics along the lines of financial metrics to Wall Street, there's the predictable ‘give me freedom or give me death’ call related to an implied threat that these metrics could be included in future regulatory burdens.”
HRPA, whose membership includes the senior HR leaders at more than 300 of the largest companies in the U.S. agrees, pointing out that such standardization and reporting requirements would in effect bury public companies already burdened with truckloads of Sarbanes-Oxley paperwork. And requiring companies to make public such information as the resources invested in hiring and training will have other consequences, such as placing them at a competitive disadvantage.
While critics such as Dunn question whether or not SHRM is even the right organization to lead such an initiative, there is acknowledgement that those who pine for standardization can’t have their cake and eat it too. “Seems like folks like me should either get involved and help determine the solution or stop complaining like the HRPA is doing,” Dunn wrote. Standardization may make sense in theory, but we need to be careful what we ask for. Moreover, we need to first get our priorities straight. In the words of the Cynical CEO, “I want to put our best foot forward when engaging investors. I don't want to scare them away by showing that HR is a money pit.”
Lorrie is i4cp's Vice President of Research. A thought leader, speaker, and researcher on the topic of gender equity, Lorrie has decades of experience in human capital research. Lorrie’s work has been featured in the New York Times, the Wall Street Journal, and other renowned publications.