International Standards Organization Publishes Standard on Human Capital Metrics Reporting

January 11, 2019

The International Standards Organization (ISO) has published a final standard establishing guidelines for internal and external human capital reporting, with a goal to "make transparent the human capital contribution to the organization in order to support the sustainability of the workforce.”

The standard is a reflection of the belief by investors and other stakeholders that currently reported metrics do not encapsulate all the measures that drive sustainable performance.   As with the previous attempt in 2011-12, the ISO standard aims to create a standard for comparable reporting among companies, despite considerable differences between companies and sectors.

23 external metrics over nine categories:  The ISO standard sets guidelines for internal and/or external reporting of metrics in the following categories:

  • Compliance and ethics (number of grievances filed, number of employees trained on ethics);
  • Total workforce costs (cost per hire, turnover);
  • Diversity (age, gender, disability and “other indicators”);
  • Leadership (trust as measured through employee surveys);
  • Organizational culture (internal reporting only);
  • Organizational health, safety, and well-being (injuries and lost work time);
  • Productivity (financial and operational metrics such as turnover measured on a per-employee basis);
  • Recruitment, mobility, and turnover (time to fill positions, positions filled internally, and turnover);
  • Skills and capabilities (total training costs);
  • Succession planning (internal reporting only); and
  • Workforce availability (number of employees and full-time equivalents).

Guidelines only, unless adopted by a government:  The standard is a set of guidelines only.  However, it does provide a benchmark that external stakeholders can point to when requesting information from companies.  It is unlikely that such information will be broadly requested in the near term.  However, Lee Webster, the secretariat of the ISO technical committee that adopted the standard (and who also oversaw the earlier U.S.-based effort), recently said:  “This document is a first step.  It will evolve, and additional definitions and formula will be added in future versions.  We’re only at the 50-yard line.  There’s still lots more work to do.”