The International Organization for Standardization (aka: ISO) has established standards for a wide range of business functions, but curiously none exist in the area of human resources. That is about to change. ISO Technical Committee 260, which now has 24 participating countries, seeks to “assist organizations in aligning and streamlining their human resource management (HRM) practices,” according to the committee’s business plan. “The member companies are chartered with the task of developing a collection of human resource management standards that will offer broad, coordinating guidance to human resources practitioners to the benefit of organizations and their stakeholders.”
Administering the U.S. Technical Advisor Group (TAG) is the human resources department of the University of Texas Medical Branch, which took over this function from the Society of Human Resources Management (SHRM) last year. According to Lee Webster, Director of Talent Acquisition and Recruitment, the role of his office is to coordinate all of the expert individuals and companies seeking to provide input. Webster was head of a standards development effort organized by SHRM that reportedly fell apart several years ago as a result of opposition from the legal and HR departments of publicly-held firms concerned that these standards would impose excessive burdens on public companies.
“Each country that wants to contribute to the standards has to create a committee that mirrors the structure of the ISO technical committee,” explains Webster. “The U.S. Technical Advisory Group sends delegates to the international meeting. Anyone can join the TAG. Fees are anywhere to $250 to $5,000 to cover administrative costs. The idea is to make sure all interests are reflected. The TAG meets at least four times a year; two of the meetings are face to face.” Companies interested in having input should email UTBM.
Webster says that the first ISO standards related to HR will be published later this year: workforce planning, recruitment, glossary of HR terminology and the role of the board directors in human capital and workforce matters. Other standards to come, he notes, include diversity and inclusion, metrics for turnover, cost per hire, time and attendance, and other key areas. “Many large companies may feel they don’t need this,” he explains, “but for developing companies and countries it’s useful to have tools to identify those practices that will be most effective to their organizations. This allows you to focus resources on those actions that will get the best results for your stakeholders.”
Webster argues that a lot of organizations can’t afford to be best-in-class in all areas. “What most organizations need to know is: what is the threshold of effectiveness? At what point is an organization effective enough in a particular part of its business so it can focus resources on those areas that will deliver the best results for stakeholders?”
The implications of developing ISO standards, Webster says, are far-reaching. The opportunity is to have these new human capital standards incorporated into ISO 9000, a set of international standards for quality management. This will make it necessary for any ISO 9000-compliant company to focus on a more systematic approach to human capital management. “This could eventually touch almost every organization around the world,” he says, adding that Deutsche Bank has taken a lead role in promoting development of these standards, both from its headquarters in Germany and its U.S. subsidiary, specifically because of the importance it places on having global standards on human capital management.
Webster predicts that within three years there will be a global standard for human capital management, “maybe a limited number of metrics that companies can report, so that information can be compared from one company to the next. If I am an investor and I know this standard exists, I will ask about it.”
He admits that many companies currently address human capital management in their annual reports, but notes that the information isn’t consistent. “Everyone calculates information differently, so there is no apples-to-apples comparison. Some people try to mystify HR and say it can’t be standardized, but 70%-80% of what HR does could or should be done in a similar way at all organizations.”
For those who argue that standards are burdensome or won’t work, Webster says, “We used to have no standards for workplace safety 30 years ago. Now everyone pays attention to safety, and safety is much better than it was 50 years ago. Why not do the same for diversity or other key HR objectives?”