Two executives from leading multinational corporations explain why their organizations have embraced ISO 30414 Human Capital reporting standards; what was involved with implementation, and how their organizations expect to use the standards going forward. The purpose of human capital reporting, they say, is not compliance but rather a marketing opportunity for investors, talent, customers, and other stakeholders, who are increasingly demanding disclosures about management practices.
In terms of progress toward a strategic approach to management across the enterprise, the European Union, these speakers say, is generally in the opening of the second half of the game (in soccer terms.)
Click here to view the show.
Click here for an ESM article about the Allianz report, as well as a link to the complete report.
Click here for a copy of the Infineon human capital report.
Ingo Kohrmeyer, Global Head of HR Services and People Operations for Infineon Technologies AG, a German semiconductor manufacturer founded in 1999, and Jochen Fehringer, Head of HR Analytics for Allianz, a leading multinational financial services firm based in Munich, joined Dr. Heiko Mauterer of 4C Group Management Consulting, a leading ISO 30414 certification company in Germany, to explain why for their organizations human capital business reporting is a business opportunity, not a compliance issue.
Here are the key takeaways.
1. The rationale
The reasons have little to do with compliance, although risk management and compliance are involved. The goals include:
- More effective people management because of a strategic and systematic approach with comparable metrics.
- A credible human capital report that is meaningful to investors, employees, customers, distribution and supply chain partners, and communities.
- A means of keeping the organization focused on key human capital value creators that can have an impact on the bottom line and other key organizational objectives.
- A marketing tool for investors, customers, employees, distribution and supply chain partners, and communities.
- A means of addressing the growing demand from investors and other stakeholders for transparent information addressing the “S” of ESG.
2. Why ISO standards
- ISO standards are already widely followed and respected around the world, especially in finance and manufacturing.
- They do not just focus on data, but rather on the practices used to fulfill the purpose of the organization, how they are measured, and how the practices are improved.
The internal champions were both in human resources leadership, with in one case a board member focused on human capital leading the way, and in the other case both a board member and the CEO.
4. The main challenges
Overcoming the fear of reputational risk—that disclosing the actual number and demographics of the workforce could hurt the brand. This has not occurred, they said. There was little concern about disclosing competitive information because they already publish human capital reports.
5. Data collection
Contrary to assertions by leading US companies in the past opposed to human capital disclosures, none of the data requirements in the ISO standards were onerous, they say. Once the system for data capture is set up, there is little work involved with creating updated reports. (Nor is the task onerous for smaller companies, based on the case of Jet Ruby, a fast-growing company providing offshore development services for mostly US companies with a US LLC based in a San Francisco. Click here for an EEA YouTube show featuring Jet Ruby’s CHRO and the ISO 30414 certification specialist who verified the company’s human capital report.)
6. Cycle time
Because both companies already published human capital reports and had the support of the board and senior management, they were able to complete all the work in several months from the initial gap analysis, although one of them chose to delay for a year the final process because of a change of CEO. Companies without a formal human capital management plan would need to add another year at least, they said, and perhaps more.
- Make it strategic—human capital reporting and ISO certifications are not bright shiny objects.
- Make sure there is CEO and board support—there is no other way to get the buy-in of colleagues across the enterprise.
- Make sure the human capital reports are communicated both internally and externally to all stakeholders.
Dr. Heiko Mauterer
Master the “S” of Environmental, Social, Governance (ESG), A.k.a. Stakeholder Capitalism
The Enterprise Engagement Alliance at TheEEA.org is the world’s first and only organization that focuses on outreach, certification and training, and advisory services to help organizations achieve their goals by fostering the proactive involvement of all stakeholders. This includes customers, employees, distribution and supply chain partners, and communities, or anyone connected to an organization’s success.
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Engagement Digital Media and Marketplaces
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The EEA Human Capital Management and ROI of Engagement YouTube channel features a growing library of 30- to 60-minute panel discussions with leading experts in all areas of engagement and total rewards.
- Enterprise Engagement for CEOs: The Little Blue Book for People-Centric Capitalists. A quick guide for CEOs.
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For more information: Contact Bruce Bolger at Bolger@TheICEE.org or call 914-591-7600, ext. 230.