How New SEC Human Capital Disclosure Rules Impact CHROs and CFOs | Visier

HR Effectiveness

For years we have heard the mantra, “people are an organization’s most important asset.” Well, recently, the Securities and Exchange Commission (SEC) approved a rule that now requires firms to disclose materially relevant human capital information. A reason for this rule is so that investors and other stakeholders can get a sense of the role employees play in creating their firms’ risks and successes. And as pointed out in this Visier article, “the change in disclosure requirements drives a whole new set of investment priorities for the CHRO, their tech stack, and their team.” The SEC goes on to specifically call out the three areas of “attraction, development, and retention of personnel as non-exclusive examples of subjects that may be material, depending on the registrant’s business and workforce.” In addition to this Visier article on the topic, this additional Chief Learning Officer article points out a few recommended metrics for the three SEC focus areas: 1) Attraction: Time to fill vacant positions, time to fill critical vacant positions, percentage of positions filled internally, percentage of critical positions filled internally, 2) Development: Development and training cost, percentage of employees who have completed training on compliance and ethics. 3) Retention:  Turnover rate. This ruling presents organizations with an opportunity to go beyond “compliance” and to use it as a chance to understand the full value of their talent strategy, “inclusive of direct, contingent and indirect (outsourced and SOW) labor the more effectively they can empower operations and drive benefit from how resources are deployed.”

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