VOTE: Help Me Name My New Office
M&A FOR HR PLAYERS: Cost Per Customer...

HRPA to SHRM: We Don't Need No Stinking Standardized HR Metrics...

Some of you may be aware that there's a big SHRM initiative underway to standardize different HR and Human Capital metrics across all companies.  On the surface, it's a noble cause.  Here's the feel good description of what's going on from from BusinessWeek:

"A group of 600 HR managers, academics, and advisers are drafting guidelines for standardizing measures of workforce diversity, turnover, job training, and the like. They are also drawing up a template for how companies should report such information to shareholders. Those involved in the project argue that companies and investors would benefit if a single set of metrics were used to gauge what they call “human capital.”

“In the financial-services sector, my supply chain is human capital—it’s relationships, it’s ideas,” says Erika Karp, head of Global Sector Research at UBS Investment Bank, who has been involved in devising the standards. A stockpicker choosing between two banks should favor the one that spends more money training and rewarding its employees, thereby lowering turnover, which is costly, Karp says. Investors will also gravitate to companies with a deep leadership bench. With the metrics, “you have more transparency on factors that result in better profitability,” she says. “It’s what a reasonable investor would want to know.”

Of course, no good deed goes unpunished.  By creating a platform that threatens to standardize, and therefore require, the collection of data and reporting of metrics along the lines of financial metrics to Walll Street, there's the predictable "give me freedom or give me death" call related to an implied threat that these metrics could be included in future regulatory burdens.  More from Business Week:

"The project, which is being spearheaded by the 250,000-member Society of Human Resource Management (SHRM), has drawn fire from the HR Policy Association (HRPA), a lobbying group whose members include the top HR officers at more than 300 of the largest companies in the U.S. HRPA says the reporting standards would place an unnecessary burden on public companies, which are already shouldering a mountain of paperwork under Sarbanes-Oxley. Information on how much time and money companies spend on training and what kinds of workers they are hiring would be less valuable to investors than to rivals, HRPA representatives say. “These are all things the competition would love to know,” says Tim Bartl, a senior official. While most companies would agree they need to have a succession plan, a requirement to name candidates for the top job would irk some, says Peter Cappelli, director of the Center for Human Resources at the Wharton School. “In a lot of firms that particular question isn’t even known to the participants.”

I like the cause/drive to standardize, but I'm not sure I want SHRM to be the ones to blaze the path.  Still, it's easy to bitch and moan that we need better metrics and then be against this type of movement.  Seems like folks like me should either get involved and help determine the solution or stop complaining like the HRPA is doing.  Of course, no one told me that there was a viable threat of this creating an involuntary reporting burden, with that reporting potentially being reported across public companies?  Check please - I'll pass if that's the case.

Lies, damn lies and statistics.  Applause to SHRM for trying to bring us all to one language.  A wagging finger to the same organization if the plan was ever to mandate the reporting standards to public companies. Metrics like turnover numbers and the like mean nothing without industry, geographical and workforce context.


China Gorman

So.....HR wants a seat at the table but it doesn't want to actually be treated like a business function. It doesn't want its metrics to see the light of day or be used to measure relative effectiveness. Is that it?

David Creelman

As one of the leaders of the SHRM Workgroup let me address this issue that HR metrics mean nothing without context. That is absolutely correct, but the same is true of financial metrics. We don't shy away from using margins as a metric just because the sort of margins a software company gets are not comparable to those in retail.

Serious users of data, such as boards and investors, are sophisticated in how they interpret the meaning of numbers based on context.

We need to get over this paralysing fear that data will be taken out of context or abandon the use of any kind of metrics, not just HR metrics.

Marc Effron

I'm surprised (ok, not really) that HR can't understand the difference between tracking metrics for company use and reporting them publicly. What company in its right mind would share competitive data with outsiders?? Let's stop pretending that investors care about this. Name a major fund manager who's demandIng this.

This is another attempt by insecure HR to attempt to prove its value. I've never seen HR's value questioned in organizations where it's actually done well.

China Vorman

Let me be clear. I think that SHRM is doing the absolute right thing by moving this initiative forward. I'm pretty astonished that HRPA has taken this position. The members of HRPA are the CHROs of the Fortune 300 -- plus or minus. Of all the groups to work against having HR metrics be recognized as critical investor KPIs I wouldn't have thought it would be them. And I really don't understand how having talent metrics be more transparent -- not required -- would be a bad development for business or for HR.


Hi China -

Thanks for weighing in on this one. Between you, Marc and David, it feels like we've got a lot of strategic types on this comment stream.

China, I'm with you, I think SHRM is doing the right thing by chasing this, and I think the backlash you're seeing with the HRPA is a symptom of a classic SHRM problem - the highest execs in the HR world have traditionally felt underserved by the org. It just seems like that's what is going on. That, and I have to tell you - although I've had limited attention span to this initiative , this was the first time I ever heard that there was a chance of company's being learned on to report in a certain way.

Marc - my gut tells me that's also part of the disconnect. You're doing standards? Great - I'd loved to see what SHRM presents as those standards. You want me to report what my turnover is? Hold up....

Thanks for stopping by all - I also got a call from SHRM so I'll call them back and clarify to make sure all of this is fair to them as well...


Brian Deming

Hey KD-
I'm on the team as well and there is a call today 7/25/12 @ 12:30 for the entire workgroup. You're welcome to dial in and get the inside scoop. Let me know and I can share the details.



I disagree with SHRM and the HRPA. To this point whenever someone promises standardized metrics around things like diversity, training and turnover, chances are the numbers alone will be meaningless. What good are training dollars spent if you don't know what kind of impact it has on the business? A more useful metric would be "x dollars spent on training will result in a x percent increase in revenue or profitability."

Requiring more metrics from HR and treating us like other functions is a positive move net/net. Other functions are just as frustrated about metrics they're required to report, and there's money to be made off of that. This happens all the time on Wall Street and the smart money loves it. For example, if you just look at a high turnover rate and assume that it reflects poor management you may lose money. You might want study previous performance and where (and with whom) the turnover is occuring before determining whether it's good or bad. Especially if the Company is going through a transformation or new leadership.

At the end of the day HR needs to be pushed to report metrics and I think the public reporting and competitive concerns are BS. But at this point in the game, SHRM should be championing more strategic metrics.

Michael P. Kilhaney

Wow....No-one responded as to what the specific company(corp,division,region,plant)goals/objectives are. All Human Resources strategic goals need be alligned with business objectives that are unique (not standardized).This is where both the SHRM and HRPA need to focus for future.

jac fitzenz

Everything Kris and others said could have been applied to accounting before there was an SEC, ect. If HR people want to be considered professionals they have to act like it and adopt the requirements of a profession (law, medicine, accounting, etc.) one of which is a standard set of terms.

human Resources

he HR Policy Association (HRPA), a lobbying group whose members include the top HR officers at more than 300 of the largest companies in the U.S

Shramana Ghosh

In fact talent metrics are very useful to track your performance as a recruiter. From application to joining recruitment metrics can help in all the facets of hiring.

The comments to this entry are closed.