This week’s Learning and Development action call focused on a specific topic: the recent SEC Mandate on human capital reporting. The discussion was facilitated by i4cp CEO and co-founder Kevin Oakes and senior research analyst Tom Stone. Here are some highlights from the call:
- To summarize the issue: The new SEC
rule, voted in on August 26, 2020 by a 3-2 margin, mandates that public
companies provide, to the extent such disclosure is material, a
description of human capital resources, including any human capital
measures or objectives that focus on managing the business. The mandate is
purposefully vague, and the SEC acknowledges that the exact measures or
objectives will depend on the nature of the company's business and
workforce. The SEC does identify some non-exclusive examples, which
include very broad measures that address the development, attraction, and
retention of personnel. The mandate's effective date is November 9, and it
applies to any public company on US-based stock exchanges.
- For i4cp's guidance on
what organizations should do about this mandate, see the article 11 Actions to Consider from
the SEC’s Mandate on Human Capital Disclosure
by Kevin Oakes and Kevin Martin.
- One learning leader on the call works
for an organization that recently went through this for the first time.
She noted that what they submitted for learning was kept brief: the three
paragraphs she had drafted on L&D were reduced to just one. Included
were metrics such as overall employee count, how many participated in
training programs, and because her remit includes customer training they
also included some metrics on that. This is just a start, and she expects
it will grow over time. This approach aligns with what other organizations
have indicated they will do: provide minimal data, and let that data stand
on its own without very much narrative for now.
- One key is that the data provided must
be supported with processes that can be repeated and with evidence that
can be shared if asked for. If there are questions about even basic
L&D data, perhaps months later as part of an audit, you will need more
than a basic spreadsheet of numbers.
- Another important step
for now is to determine where ownership of human capital disclosure will
reside within the organization. It’s a multi-disciplinary responsibility,
so at the very least the HR function will be more involved in the
reporting process than before. Also consider how best to optimize
collaboration between the Workforce Analytics function and Finance,
Investor Relations, and the General Counsel.
- One call participant noted the importance of repeatability for L&D metrics that might now or someday get reported out (the same would be true for all human capital metrics). He said his organization is working to automate the gathering of some key metrics to eliminate manual processes, and is developing an internal dashboard for ongoing tracking.
In addition to this recording, please see the i4cp Coronavirus Employer Resource Center for new research and next practices to help address the COVID-19 pandemic.