Marina del Rey, California (PRWEB) December 19, 2012
A preview of a new white paper by Human Capital Management Institute (HCMI) discusses the contribution of human capital metrics to a company’s stock price and continues to challenge the exclusion of human capital data in traditional public company reporting. For this paper, over 22,000 companies were analyzed and six human capital metrics were tested using 16 years of public company data from 1996 to 2011. Results include findings such as the following: a 10% increase in selected human capital metrics is associated with stock price gains ranging from 3% - 19% and the Total Cost of Workforce metric is superior to the standard headcount metric.
While Finance and Human Resources are separate business functions, the white paper’s findings provide common ground on which the two areas can collaborate. Per HCMI’s previous white papers, workforce metrics don’t stop at “headcount”. Rather, intangible assets (a.k.a “human capital”) play a major role in a company’s financial performance.
Jeff Higgins, CEO of HCMI says: “We can now answer the question not of ‘if’ effectively managing human capital using the right metrics impacts stock price, but how much it impacts stock price. HCMI believes these metrics from Human Capital Financial Statements (HCF$™) are the most definitive means to quantify workforce productivity in existence.”
According to Dr. Don Atwater of Pepperdine University’s Graziadio School of Business and Management, Department of Economics, “The old news is that ‘people are our greatest assets (and costs)’, but what our research is showing is that there is a connection between companies that actually show that with their actions and those that do not in terms of shareholder value. There really are leaders and laggards.”
“HCMI’s Human Capital Financial Statements(HCFS ™) 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 and also known as the “father” of workforce analytics.
Look for the entire white paper (due out in January 2013), which contains a more detailed breakdown of the analysis and findings. For previous white papers on related topics, please visit http://www.hcminst.com.
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 clients, HCMI delivers workforce analytics and planning training, risk assessments, consulting, and analytics and workforce planning technology tools including SOLVE Workforce Intelligence Software.