MCBASSI & COMPANY

Where Does Human Capital Fit in the Sustainability Agenda?

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My new article in the May 2014 issue of the Cornerstone Journal of Sustainable Finance and Banking explores new research (with David Creelman and Andrew Lambert) on the progress some companies are making in reporting human capital metrics in their integrated reports.

While encouraging that a growing number of firms are beginning to disclose more information on elements of human capital, it’s clear that most of the disclosures still fall short of providing a comprehensive look at what’s creating or destroying value on the people side of the business.  Indeed, many key human capital measures known to predict future performance (employee engagement, training investments, internal promotion rates) are being reported by less than half of even those companies integrating financial and human capital reporting.

I propose a framework that CEOs and Boards of Directors can use for two purposes:

  • To measure and manage six key elements of human capital risk
  • To serve as a foundation for communicating more effectively with investors

Curious?  Check out the article for full details.

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A Smarter Annual Report webinar

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Join us on May 29, 2014, at 12:00 noon EDT for a webinar on “A Smarter Annual Report — how companies are integrating financial and human capital reporting.”

To register for the webinar, simply click here.

We hope to see you there!

Drum Roll, Please

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Finally: the moment you’ve all been anxiously awaiting.

The winner of the 2014 HR Analytics Haiku Contest is Evan Sinar!! (Cue wild applause and confetti.)

Evan’s winning haiku captures something of the very essence of analytics:

The perilous route
From raw data to actions
Analytics guides

As the winner, Evan will receive copies of two must-reads: the HR Analytics Handbook and Haiku U.

Congratulations, Evan, and thanks to everyone for all the clever, funny submissions we received.  We enjoyed reading them, interpreting them, debating them, and, of course, counting their syllables.

Six Human Capital Risks Your Board Needs to Know About

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Boards of directors have a fiduciary responsibility to manage risk.  Although there is no shortage of risk on the “people side” of most businesses, it is rare for boards of directors to have the right information to prudently manage these risks.

Part of the problem is that boards tend to focus too heavily on executive talent and too little on employees below the executive level.  But another part of the problem is that HR often fails to provide a coherent view of what creates, limits, or destroys value on the people side of the business.

The figure below, originally proposed by Jim Marchiori (Executive Director, University of Colorado Global Energy Management Program), presents a risk-based “people management framework.”  It can be used both for helping boards to ask better “human capital questions” and for improving HR reporting to the board.

  

Some questions to bring this perspective to life include:

1.  Capability Risk:  Do our people have the knowledge, skills, resources, and business processes that will enable them to perform effectively?
2.  Alignment Risk:  Do our people really understand our business strategy and goals?  Do they perform their day-to-day jobs in alignment with those goals?
3.  Availability Risk:  Are we finding and acquiring the right people?
4.  Turnover/Demographic Risk:  Are we retaining key people?  Do we have a pipeline sufficient to replace departing employees?
5.  Engagement Risk:  Do our people go the extra mile?  Does this show through to our customers?
6.  Leadership Risk:  What is the risk that any initiative will fail because we don’t have the leadership depth or quality needed?

These are the sorts of questions you should be building into your organization’s HR analytics strategy, including a process for regularly updating your board of directors on high-level metrics, trends, and predictive analytics.

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HR Analytics Haiku Contest

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To celebrate National Poetry Month this April, we at McBassi & Company are sponsoring what we believe must be the first-ever HR Analytics Haiku Contest.

For those of you in need of a refresher, a haiku consists of exactly 17 syllables, with the syllables arranged in three lines of 5-7-5.

The pros would, of course, provide a more nuanced definition.  And while we here at McBassi & Company are analytics experts, we are definite amateurs when it comes to haikus.  As evidence, check out the following three examples of HR Analytics haikus, written by none other than McBassi’s (ever-poetic) staff:

Supply meets demand
HR analytics has
Finally arrived

Disparate data
Creatively analyzed
Creates clear insights

Got messy data?
No worries – analytics
Still a good option

Think you can do better than that?  Then this is the contest for you!

Contest Rules
1.  Entries must be received by midnight (EDT) on April 30, and should be sent to info@mcbassi.com with the subject line “Haiku Submission.”  (Multiple entries per contestant are acceptable.

2.  All haikus must be original.

3.  The winner will be chosen by the McBassi staff, whose decision is final.  Disputes and protests will be reviewed at the sole discretion of the staff.

4.  The winner’s haiku becomes the property of McBassi & Company and will be published, with full attribution and kudos to the author, in McBassi’s May newsletter.

Prize for the Winner
In addition to the expected national recognition and fame that will accompany being the first-ever winner of the HR Analytics Haiku Contest, the lucky winner will receive two books:

  • the HRAH (at the risk of stating the obvious, this stands for HR Analytics Handbook)
  • the HUFAZ (which, equally obviously, stands for Haiku U: From Aristotle to Zola, 100 Great Books in 17 Syllables)

So send those responses in — and may the best haiku win!

 

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