Demand for increased transparency has never been stronger. From fraudulent tax returns to federal stimulus spending, the American public is eager for information. Even the venerable and discreet Swiss banking system has caved to the calls for more transparency. Now let’s extend this enthusiasm for information and transparency to the private sector. Now is the time to break down the barriers to human capital metrics that exist within corporations.
No matter the size, industry or geographic location, most large companies are fiercely protective of human capital data and metrics within their organization. Companies go to great lengths to ensure that employees, even leaders, only see metrics for their area of responsibility. And while I don’t argue that certain elements of personal data need to be protected and access limited, the majority of aggregated metrics do not.
Companies silo and restrict human capital metrics for a one simple reason. It’s easy. Or perhaps more accurately stated the alternative is just too hard. Historically, companies that have developed or invested in a platform for analysing and reporting human capital metrics largely mirror security and access rights from the underlying transactional HRIS system (SAP, Peoplesoft). This doesn’t make sense.
First, the users and functions are completely different. Analytic and reporting platforms are used by business intelligence experts and analysts to understand the people variables that positively or negatively impact business results. For example, how is a low retention rate of high performers in a key back office function impacting business results, customer experience and brand? Gaining a better understanding of these variables position a company to make better decisions and drive business outcomes. On the other hand, a transactional system is focused on creating an efficient process – not business impact.
No matter the sophistication, many companies still lack common definitions and calculations across the entire organization. But instead of gaining consensus around definitions, the easy route is to isolate metrics to certain functions or business units in order to avoid any possible confusion. However, there is a cost to this convenience – a lack of consistent internal benchmarking and perhaps even more importantly inhibiting cross functional and cross business understanding of the power of human capital analytics.
The Street is already demanding greater transparency around external human capital reporting (but that’s another post). Shouldn’t companies start by sharing human capital metrics across the business first?