Human Capital Factor Ratings System Addresses Issues CEOs Cant Ignore
This is the first employee engagement survey tool that can actually predict future value creation or risks through people. This is one employee engagement survey no CEO, CFO, or investment manager can ignore.The First Survey to Predict Future Value Creation Through People
Moving Beyond Engagement as a Soft Metric
It’s well known that most employee engagement surveys rarely end up driving corporate decisions and in fact often are generally ignored or only occasionally referenced. Not so with the Human Capital Factor survey. Those who ignore this survey do so at their peril.
The Human Capital Factor (HCF) survey, created by Irrational Capital, Conshohocken, PA, reframes workforce engagement and well-being as a quantifiable asset—one that can be measured, benchmarked, and actively managed to enhance profitability and future equity value creation. Companies using this survey cannot ignore the results, because they could point either to future equity value creation or signal danger signs ahead.
By statistically proving the link between how companies treat their people and how they perform financially or in the stock market, the HCF Investment Ratings System and survey turns human capital into a strategic lever for enterprise value creation. According to the company, the Human Capital Factor® (HCF) Investment Ratings System translates workforce strength into statistically validated insight, linking how companies treat their employees directly to future enterprise value. Both the J.P. Morgan quantum analytics division and the Morningstar ratings system have validated the ability of the HCF to predict future equity creation.
The Human Capital Factor consists of an employee survey specifically designed to identify the sentiments and related factors that connect workers to future value creation or destruction. Unlike other employee surveys, this is specifically designed to predict future equity value creation based on the level of employee engagement in the firm’s purpose, goals, objectives, and values. Ignore this survey, and your organization risks failing to optimize returns for shareholders and investors, based on independently validated research.
The First Survey to Predict Future Value Creation Through People
The EEA now includes the Human Capital Factor as one of tools recommended to help organizations turn people management from a cost- into a profit-center. The EEA also recommends PVIC, the People Value Impact Calculator,created by Talent Management Evolution and marketed through its International Center for Enterprise Engagement, an engagement process design, implementation, and impact measurement firm, and the Enterprise Engagement Alliance. Thanks to the generosity of the Maturity Institute, its Stakeholder Management Assessment Calculator is available free to any organization seeking to assess the effectiveness of its stakeholder management practices.
The Human Capital Factor® is a rigorously developed investment factor that quantifies the connection between employee experience and enterprise value creation. The HCF draws on management science, empirical finance, and advanced statistical modeling to measure the economic impact of workforce quality.
Click here for a sample Human Capital Factor report.
After identifying that companies with exceptional workforces consistently outperform the market, Irrational Capital formalized the Human Capital Factor® as a repeatable, data-driven investment signal. In 2024, Irrational Capital extended this institutional-grade insight to individual companies through the launch of the HCF Investment Ratings System—a detailed survey and analysis process that translates employee sentiment into actionable enterprise value intelligence.
Moving Beyond Engagement as a Soft Metric
The HCF Investment Ratings System moves beyond engagement as a “soft” metric. It demonstrates, with statistical rigor, how specific workforce attributes correlate with financial outperformance and long-term value creation, the company says. The report delivers clear, prioritized insights for leadership teams. Strengths and improvement areas are explicitly linked to their potential impact on enterprise value, enabling focused action rather than generalized culture initiatives.
Using employee engagement surveys, the system evaluates a statistically significant cross-section of employee sentiment across seven dimensions of the Human Capital Factor®. Results are:
- Benchmarked against a proprietary database of 4,000+ companies
- Broken down by department and gender
- Analyzed by industry, size, seniority, and geography
- Presented in decile rankings across all seven dimensions
A departmental heat map highlights specific focus areas where targeted improvements can drive measurable value gains.
According to Irrational Capital, for private equity firms and institutional investors, HCF Ratings offer an objective lens into human capital performance across portfolio companies. Annual monitoring enables active management of workforce-driven value, while portfolio-level ratings can be shared with current and prospective investors as a differentiated performance signal.
The HCF Investment Ratings System applies advanced statistical modeling to employee engagement survey data, evaluating performance across seven empirically derived dimensions that drive value creation. The methodology integrates management science principles, empirical financial analysis, and robust statistical validation. Survey data is analyzed against Irrational Capital’s proprietary benchmark database of more than 4,000 companies. Each organization receives decile performance rankings, comparative analytics, and department-level diagnostics. The output is a comprehensive HCF Ratings Report—an enterprise value–focused assessment that translates workforce data into financial insight.
HCF is designed for corporate leadership seeking clear, evidence-based recommendations aligned to enterprise value outcomes. It identifies where leadership attention and resources will have the greatest impact on long-term performance.
For investors, the Human Capital Factor® offers a measurable way to enhance portfolio value. Through ongoing monitoring and management of HCF performance, firms can unlock operational upside and strengthen reporting transparency to stakeholders.
Enterprise Engagement Alliance Services
Celebrating our 17th year, the Enterprise Engagement Alliance helps organizations enhance performance through:1. Information and marketing opportunities on stakeholder management and total rewards:
- ESM Weekly on stakeholder management since 2009. Click here to subscribe; click here for media kit.
- RRN Weekly on total rewards since 1996. Click here to subscribe; click here for media kit.
- EEA YouTube channel on enterprise engagement, human capital, and total rewards since 2020
Management Academy to enhance future equity value for your organization.3. Books on implementation: Enterprise Engagement for CEOs and Enterprise Engagement: The Roadmap.
4. Advisory services and research: Strategic guidance, learning and certification on stakeholder management, measurement, metrics, and corporate sustainability reporting.
5. Permission-based targeted business development to identify and build relationships with the people most likely to buy.
Contact: Bruce Bolger at TheICEE.org; 914-591-7600, ext. 230.
