Note: John Hollon, editor of our sister site, TLNT.com, offers his view that SHRM got “big footed” by the staffing industry and others when it withdrew its controversial Investor Metrics standard for valuing the human capital of a public company. Read his commentary here.
A business standard that would guide companies in establishing the economic value of their workforce has been withdrawn by the Society for Human Resource Management, following a vote last week by the task force that developed it.
Faced with opposition from a host of publicly held companies, the U.S. Chamber of Commerce, and the American Staffing Association, SHRM’s HR standards director Lee Webster conceded “there wasn’t sufficient support from the business community to proceed with this effort.”
The Investor Metrics standard was developed to provide a uniform way of valuing a company’s human capital that investors could use in making investment decisions. Almost three years in the development, the standard had gone through two public comments and was being readied for presentation to the American National Standards Institute (ANSI) when it was withdrawn.
Its future is now in limbo, after Webster said the task force that wrote the standard “decided to discontinue work.”
Months ago, the HR Policy Association asked SHRM to pull the standard. The organization, comprised of chief HR officers of many of the largest companies in the U.S., said, “The proposed standard would have companies disclose almost every corporate cost associated with the hiring, retention, and training of employees and contingent workers, plus detailed information regarding how the company is organized and staffed.”
Arguing that “the investor community is not asking for this information,” HR Policy went on to insist, “Companies disclosing the information would be placed at a considerable competitive disadvantage relative to organizations seeking to raid their talent; competitors trying to gain insights into how they are organized, staffed and structured; and hedge funds and other entities seeking financial prey.”
Because the standard required companies take into account the value of their temporary and contract labor workers, the American Staffing Association played a leading role in the opposition. Stephen Dwyer, ASA’s general counsel, told Staffing Industry Analysts the organization believed adopting the standard would reduce workforce flexibility, compel the disclosure of proprietary staffing practices and other confidential workforce practices, and increase the reporting burden.
In a statement on the ASA website after SHRM withdrew the standard, Dwyer wrote,
ASA and its allies also stressed that the metrics, which were largely drafted by human resource consultants, would prove meaningless since investors would not have any benchmarks with which to interpret and compare them, and that the standards were outside the boundary of the kind of work that SHRM should be doing. Instead of supporting human resource professionals and the businesses that employ them, the standards would, in actuality, be harmful to their companies.
He said SHRM was informed of these concerns at a late October meeting hosted by the U.S. Chamber of Commerce.
In addition to ASA, attendees included representatives of AMN Healthcare and ManpowerGroup as well as representatives from more than 50 companies and organizations, including Northrop Grumman, Accenture, National Investor Relations Institute, HR Policy Association, PepsiCo, Emerson Electric, Northwestern Mutual, General Electric, Motorola Solutions, and Lockheed Martin. Without exception, attendees pressed SHRM to have the proposed standards withdrawn.