FW Cook highlighted the following:
- Word length varied dramatically from just nine words to 1,582 words, with a median length of 369 words.
- 39 companies included “extensive” human capital disclosures (i.e., more than simply stating that the company considered diversity, recruiting, training, compensation, and benefits to be important factors in its strategy).
CAP Partners presented similar findings in a recent post, noting that more robust disclosures are now trending at between 1,000 – 1,500 words. Nearly all disclosures to date depend heavily on a qualitative description of core values, programs and practices. Very few companies are disclosing actual objectives and/or metrics used to manage the business. Examples of those that do include:
- Tyson Foods discloses that increasing its employee retention rate is a goal. Actual results (i.e., a 1% increase), but not quantitative goals, are disclosed.
- Visa discloses that it established goals to increase diverse representation at the vice president level and above in the U.S. by 50 percent in three years and to increase representation for the entire workforce in the U.S. by 50 percent in five years.
- Wells Fargo discloses the adjusted pay gap between (1) women and men and (2) people of color and their white peers (both are more than 99 cents for every $1) and reports that the unadjusted pay gap is higher than the company would like it to be.
- Center Subscriber TE Connectivity lists key talent metrics, “workforce demographics, critical role pipeline data, diversity data, and engagement and inclusion indices,” but has kept targeted performance levels private.
Aon published perhaps the most comprehensive study we have seen of quantitative versus qualitative HCM disclosures. The research found that:
- Just over half of the companies reviewed disclosed diversity (53%) and geographic location of employees (52%).
- Just under half disclosed talent development (49%) and health and safety (46%).
- Quantitative disclosures were most common when discussing collective bargaining agreements (62% of CBA disclosures), turnover/attrition (55% of such disclosures), and diversity (49%).
- Interestingly, the number of employees had a larger correlation with the depth of disclosure than revenue.
- Aon concludes with a point worth remembering - complying with the rules is just the first step. Investors, proxy advisory firms, and employees are all increasingly seeking direct evidence of how companies are managing human capital.
The Center also recommends keeping an eye on developments at the SEC. It is likely that Gary Gensler will win confirmation and the SEC could undertake additional rulemaking to increase human capital reporting requirements.