Human Capital Management Institute Announces Release of Human Capital Financial Statements (HCF$)

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Statements Provide Public Disclosure of Workforce Assets

“HCMI’s Human Capital Financial Statements represent the endpoint HR has been searching for to standardize measurement and enable comparison of human capital performance across industry, and geography,” states Dr. Jac Fitz-enz, CEO, Human Capital Source;

Around the world organizations frequently state that employees are their most valuable asset, and yet publicly traded organizations provide little or no information on this “most valuable asset” to investors or the public. Regulatory securities commissions, such as the Securities and Exchange Commission (SEC) in the United States, require extensive disclosure regarding all major assets including financial, physical, and technological/intellectual property. However, they do not require disclosure of what is, for most organizations, their largest annual operating expense. Human capital and talent management are differentiators of success, sources of competitive advantage, intellectual capital value creation, and major business costs. Therefore, human capital should be reported as a part of or a supplement to public financial statements.

Human Capital Management Institute’s Human Capital Financial Statements (HCF$™) provide a standard means with which to measure, report and disclose a company’s human capital. A company’s workforce, currently treated conservatively as an expense, can finally be reported separately for what it is: a critical factor in the success of any organization. Traditional financial statements provide a standard way in which to evaluate and compare performance across industries and countries; separating top from average performers and identifying undervalued from overvalued assets. Now for the first time, investors can gain transparency into human capital for their investment decisions.

Companies that adopt HCF$™ gain greater transparency and a method to truly value knowledge capital in a 21st century world in which knowledge capital drives market valuation far more than financial or physical capital. These companies will also have the ability to make better informed strategic workforce decisions by trending shifts in workforce productivity, costs, and value creation. The statements quantify the total value of the workforce and highlight the different levels of value contribution for different job roles. Organizations that adopt HCF$™ will also have the ability to calculate the total cost of workforce and analyze HR programs that create value.

Jeff Higgins, CEO of HCMI states: “Human Capital Financial Statements represent far more than a set of reports. They are a clear, quantitative, standard – a surgical tool - that provides insight for investors and proactive management tools for company senior leadership. By using data instead of gut instinct, organizations can better manage the workforce.”

HCMI’s Human Capital Financial Statements are changing the way financial and human capital data is reported.

HCMI’s Human Capital Financial Statement whitepaper is available for download at HCMI will be offering a Human Capital Financial Statement webinar education series through April 2011. Visit to learn more about HCMI’s Human Capital Financial Statements and webinar schedules.

About HCMI
The Human Capital Management Institute was founded on the belief that organizations can, and must, find better ways of measuring their investments in human capital. We strive to fundamentally change the way organizations make decisions about their workforce, and our vision of the future is one in which human capital measurement and information is as integral to business decision making as financial information is today. Serving global and domestic clients, HCMI delivers advanced workforce intelligence training, assessments, consulting, and the worlds most advanced analytics and workforce planning modeling tools.

About Dr. Jac Fitz-Enz and Human Capital Source
Dr. Fitz-enz introduced human capital metrics to HR and finance in 1978 with the founding of Saratoga Institute. In the past 30 years he has developed the methodology and advanced analytics through work in 46 countries. His 12 books, two Book of the Year Awards, form the foundation of the study of human capital analytics. He has been cited as one of the top five HR gurus and as one who has changed the way organizations manage people. Dr. Jac as he is known, consults, writes and speaks worldwide on predictive management and analytics from his office in San Jose, California.

Cheryl Farley
Program Director
Human Capital Management Institute


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