What Human Capital Data SEC Requirements Mean and How Stories Help
On November 9th, new rules on human capital from the U.S Securities and Exchange Commission went into effect. Publicly traded companies are now required to share human capital information such as turnover, the total cost of training and development, and total workforce cost. Companies must begin publicizing this information on their upcoming quarterly or annual public financial statement.
There is also an expectation that companies disclose efforts to address challenges. Meaning, it’s important to think beyond the data disclosure to the “what if.” What if the information you disclose begs the question, “What are you doing to fix, maintain, or accelerate things?” Investors, customers, employees, and future talent will expect to see the actions you take.
According to the executive director for the Center for Talent Reporting, Dave Vance, states in Chief Learning Officer publication, these are the measurements that companies can publicly disclose:
Attraction: Time to fill, time to fill critical positions, percentage of positions filled internally, percentage of critical positions filled internally.
Development: Total cost of training and development, percentage of employees who receive training in compliance and ethics, percentage of employees who receive any training, average hours of formal training per year, percentage of leaders who receive training, percentage of leaders who receive leadership development.
Retention: Turnover, turnover for critical positions.
Recommended metrics: Employee engagement score, leadership trust score, diversity by gender, age, disability, race or national origin, leadership diversity, pay equity, human capital ROI, total workforce cost, number of full-time employees, contingent/contract, and temporary workers.
Although this affects public companies only, we expect many best practices to evolve and benefit companies of all sizes.
Building Leadership Trust with Stories
It’s important that everyone, especially leaders, take accountability for walking the talk. One powerful way to do this is by using stories.
The case for culture and stories goes right to the heart of a key SEC disclosure; Leadership Trust. And we do have a challenge.
The 2020 Trust Barometer survey by Edelman showed that only 50% of people believe CEOs do what is right. And only 29% believe companies serve the interests of everyone equally.
The good news? In the same survey, 92 percent expect CEOs to speak out on the issues that matter to employees. 73% of employees want employers to give them a voice on values.
The Case for More Employee Stories at Work
A strong culture where values are celebrated and visibly reinforced will help your Trust Index.
Trust is built over time. The foundation of trust with talent is the commitments you make in formal or informal employee value propositions, and company values overall. It requires following through time and again. Not once, but repeatedly. Not by a few, but all.
Building trust also requires visibility. The commitments you make and their positive impact need to be seen so that others can model behavior and hold each other accountable. Authentic unfiltered stories, not bullet points or words on a wall, are the best tool for demonstrating leadership’s commitment to values and building trust at scale.
Stories are Fuel for Growth
Demonstrating leadership’s commitment to values, and keeping the spotlight on examples is more important than ever. It affects your brand, ability to recruit top talent and win new business.
Candidates, customers, prospects, and of course your employees expect to see behind-the-scenes proof of your commitment to things like diversity, equity, and inclusion (DE&I), employee mobility, social justice, and community engagement. They want to see you walk the talk through the lens of people they trust - the employees who know you best. Stories can help.
“Sharing employee stories and examples of values at work can boost trust in leadership and peers. It’s also a tremendous teaching and mentoring tool.” Erik Ayers, CEO GoodSeeker.
GoodSeeker Helps: Collect, Promote, and Learn From #EmployeeStories
At GoodSeeker we believe that employee stories can boost trust, transparency, and your brand at the same time. We’ve developed a storytelling platform that makes it easy and rewarding for employees and ambassadors to spotlight success stories at work that highlight your values and culture in action. With our product, leaders, managers, and peers can easily highlight employee voices, keep culture intact, and celebrate success in the workplace.
GoodSeeker stories are a form of real-time reporting on the positive impact of DE&I commitments, EVP activation, equitable appreciation, and so much more.
We don’t expect companies to disclose the number of stories highlighting values based on headcount, by staff level, department, etc. However, we do think that companies who are serious about trust and transparency will start doing more to give good work the internal and external visibility it deserves- and in turn, stay true to values and a culture of trust.
Here are 4 Ways GoodSeeker helps with the new Human Capital Disclosure Requirements:
- Purposeful Engagement: The more employees feel connected to their work culture, the less likely they’ll be to leave; the less turnover will ensue and the more companies will save money. Using stories to connect employees to your values and brand.
- Equitable Visibility: Using stories to give teams visibility shows your commitment to internal mobility and equal opportunity. People want to know that their skills and talents are visible across the company. With our product employees have a voice and leaders can create campaigns to find stories centered around a specific company value.
- Leadership Trust: Storytelling helps create positive relationships on your team, which builds trust between employees and leaders.
- Transparency: Stories are proof, gives insight into the company. Stakeholders can view stories by departments, titles, and values to see where the company may need improvement. This could also show a correlation between turnover and success stories. Stories can show what teams have high turnover.