Attention on human capital and other workforce metrics continues to percolate as a coalition of 79 institutional investors in 10 countries dubbed "ShareAction", holding nearly $8 trillion in assets under management announced the launch of the "Workforce Disclosure Initiative" at 75 large global companies, including Wal-Mart and Apple. The initiative consists of sending a survey to targeted companies seeking detailed information on a wide variety of workforce, supply chain, human capital and social practices metrics. ShareAction, the London-based umbrella organization for the coalition, including the UK's Legal and General and HSBC Asset Management, AXA Investment Managers, HSBC Asset Management, Hermes, a Trillium Asset Management, Walden Asset Management and pension funds such as RPMI Railpen and UFCW.
Through the coalition, ShareAction's Workforce Disclosure Initiative aims to provide investors with the ability to influence companies to create better jobs and work environments as contrasted to the "too many poor quality and precarious jobs around the world." The survey is based on “evidence that good employment practices contribute to meaningful financial returns,” and according to ShareAction, it will put shareholders in a position to exert greater influence on workforce management issues by creating a single request that “companies disclose comparable workforce information." Some of the specific data sought in the 43-page survey include:
- Governance of Workforce: Information about the board's role in overseeing the workforce as well as what type of "policy commitments" the company has made, such as policies on equality and diversity. The survey also asks whether the company has carried out a human rights impact assessment and seeks detailed information about supply chain risks.
- Workforce Composition: Detailed information about workforce composition including the percent of male and female employees at various seniority levels as well as how the company uses "boundaries" to determine levels of seniority and the respective percent of each gender employed at each level. Also asks what percentage of basic salary for the workforce is based on minimum wage, whether the company has a "commitment to a living wage," and requests detailed pay ratio information as well as the number of men and women in each pay quartile, similar to the UK gender equity reporting that takes effect in 2018.
- Workforce Stability: Asks for detailed information on voluntary turnover and relations with key suppliers.
- Workforce Development: Seeks a detailed explanation of the company's training and development opportunities it provides to its employees. It also asks for detailed information about internal hire rates, separated by job level and gender.
- Workforce Well-Being and Engagement: Asks respondents to detail employee grievance mechanisms which "meets the UN Guiding Principles on Business and Human Rights criteria" and how often that grievance process is used. Also asks whether the company monitors critical suppliers for employee rights issues.
As noted above, the attention to human capital, social, and environmental issues has risen dramatically in 2017, particularly in the European Union and the United Kingdom. The emerging strategy is to pursue policy changes through pressure and demands from issue activists. However, among larger, more “traditional” institutional investors, some of this information, appropriately framed is of interest as they seek to gain insight into company operations beyond available financial data. This survey requests data similar to attempts among organizations in the U.S. and elsewhere to create standards for disclosure of human capital data. Although those attempts have not been successful so far, as interest continues to increase, it is worth tracking this and similar initiatives.