18 Mar. 2013 | Comments (0) Share Follow @Conferenceboard
Webster defines chaos as a state of utter confusion or a confused mass or mixture. I submit that the state of human capital analytics fits that definition.
The proof? At a macro level, there is no HR organization that has developed a comprehensive, cohesive approach to, or standards for, human capital analytics.
The American National Standards Institute (ANSI), a private, non-profit organization that administers and coordinates the U.S. voluntary standardization and conformity assessment system, is a member of the International Organization of Standards (the ISO folks), and is in the very early stages of developing and adopting HR measures, metrics, and process standards. ANSI designated the Standards Development Organization (SHRM), to develop HR measures and metrics. (By way of full disclosure, I am a voting member of the SHRM Task Force on Measures and Metrics.) Suffice to say, progress has been slow, and, at times, halting. At best, this will be a very long journey.
At the micro level, neither the HR Association world, the business association world, nor the HR consulting or technology firms have developed a comprehensive, coherent approach to human capital analytics.
Through its work with ANSI, SHRM is staking a claim to the human capital analytics space, though its efforts so far are neither comprehensive nor cohesive. Other prominent HR associations approach HR metrics from their narrow perspective. These include:
- American Society of Training & Development (ASTD)
- HR|People & Strategy (HRPS)
- International Association for Human Resource Information Management (IHRIM)
- International Foundation of Employee Benefit Plans
- World at Work
In the business association world, the Corporate Executive Board, through its Corporate Leadership Council (CLC), published The Metrics Standard, Establishing Standards for 200 Core Human Capital Measures, back in 2005. Despite the herculean task of dozens of dedicated folks, the Metrics Standard hasn’t gained much traction in the marketplace.
While HR consulting firms, consulting firms with human capital consulting practices, and numerous technology firms are doing lots of beneficial and interesting work in this space, they are only adding to the chaos, as they are driven by their varying perspectives, capabilities, and business interests. Once again, a cohesive context for human capital analytics remains elusive. Unfortunately, as a result of this exhaustive list of organizations that are NOT coming up with a comprehensive and cohesive approach to human capital analytics, chaos still reigns.
A thought experiment
Here is a thought experiment to conduct. Ask the HR leadership folks in your organization for the top 3 to 5 metrics your HR organization should collect and report to the CEO and Board. Now, ask each of them to make a written argument for each of these metrics and how they link to business performance and strategy execution.
What are the results of the experiment? Was there consistency among the metrics? Was there a compelling linkage between the metrics and business performance?
I didn’t think so.
Chaos to Coherency
The goal of this blog is to eliminate the chaos and add a heavy dose of coherency and context to the whole notion of human capital analytics. In subsequent posts, I will argue that HR’s path to gaining powerful, compelling influence over the CEO and board will be, in part, through a coherent set of credible human capital metrics. I will also lay out specific human capital financial metrics, as well as a comprehensive framework to assess the value and significance of numerous HR metrics. From time to time, I will also opine on contemporary issues in the human capital analytics space. Of course, I welcome your comments and invite a constructive discourse as we navigate HR together out of chaos.
Tune in to my next blog where I will discuss two foundational concepts that underscore the financial nature of human capital.
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