Talent Edge Weekly - Issue #132

Covers how to redefine quality of hire, internal mobility policies, shifting from jobs to skills, workforce planning, and human capital disclosures regard SEC disclosure mandates.

August 28, 2022

Welcome to this week’s issue of Talent Edge Weekly—the weekly newsletter for human resources practitioners, bringing together insights about work, the workplace, and the workforce from various sources.

If you find value in this issue or any of its resources, please share them with your network by using the social media icons at the top of the newsletter.

Have a great week, and I look forward to sharing more ideas in next week’s Edge!

Brian 

Brian Heger is a human resources practitioner with a Fortune 150 organization and has responsibilities for Strategic Talent and Workforce Planning. To connect with Brian on Linkedin, click here.

THIS WEEK'S CONTENT

  • Why You Must Redefine Quality of Hire (and How) | Gartner | Addresses how quality of hire (QoH) can be better defined and measured. Offers a 2x2 matrix and a set of questions that can help determine QoH.

  • Do Internal Mobility Policies and Guidelines Enable or Detract from Career Development? | Brian Heger | I share how policies and guidelines can unintentionally impede internal mobility by overly regulating the “rules and conditions” under which these moves occur. 

  • Moving Your Organizational Strategy from Jobs to Skills | Deloitte Insights | Covers a few data points and perspectives on organizations' progress in adopting skills-based talent practices.

  • Talent Disruption: Strategic Workforce Planning (SWP) in the Age of Labor Shortages | Harvard Business Review Analytics Services | A 12-page white paper that offers a perspective on how the effectiveness of ‘borrow’ strategies in SWP will require a strategic collaboration between HR and the Procurement function. 

  • Corporate Human Capital Disclosures: Early Evidence from the SEC’s Disclosure Mandate | Harvard Law School Forum on Corporate Governance | Shares findings from a textual analysis study of the human capital disclosure of more than 3,000 unique public companies.

THIS WEEK'S EDGE

According to a LinkedIn report on the future of recruiting, tactical recruiting metrics — like time to hire, candidates per hire, or offer acceptance rate—are commonly used since they are easy to measure. However, more strategic measures, such as quality of hire (QoH), remain elusive for many recruiting teams because they are harder to quantify. Of the eight recruiting metrics mentioned in the report (page 24), recruiters that were surveyed view QoH as having the most significant gap between its importance and current use. Stated differently, recruiters believe QoH is a critical metric that is difficult to measure. As recruiting teams think through ways to track and measure QoH—an indicator of how much value a new employee brings to a company—this Gartner article provides a few ideas. It mentions that one challenge of measuring QoH is that organizations often rely heavily on what the hiring manager thinks about the new hire in the current role. And given how rapidly skills and role requirements change — coupled with the focus that many organizations have on internal mobility—the authors argue that: 1) the emphasis on QoH must shift from hiring manager satisfaction to the organization’s perspective, and 2) from specific, role-based skills to cross-role potential. Figure 6 on page 27 includes a 2x2 matrix and a set of questions that can help determine QoH by assessing an employee’s current and future skills preparedness.  

Many organizations have internal mobility policies and guidelines to support career development. These organizational resources help to guide decision-making, streamline internal processes, ensure compliance with laws and regulations, and minimize business disruption. And while policies and guidelines are essential, they can unintentionally impede internal mobility by overly regulating the “rules and conditions” under which these moves occur. A few examples of policies and guidelines that influence internal movement include 1) conditions on how long an employee should be in a role or with the company (e.g., 12, 18 months) before applying to other internal opportunities. 2) requiring employees to request and receive permission from their managers before they can pursue an internal opportunity, 3) restricting employees from moving more than one level in the organization, 4) discouraging internal recruiters from reaching out to internal workers that might be a good match for another opportunity. These are only a few policies and guidelines that can influence internal mobility. As you think through various policies and guidelines that affect internal mobility, which do you believe are necessary and enable internal mobility? Which of them detract from internal mobility and should be eliminated or modified? While these answers will vary by organization, answering these questions can help talent leaders determine which internal mobility policies and guidelines will work best for their organizations. 

Talent management practitioners continue to reimagine their organizations’ talent practices based on skills rather than fixed, static jobs. I have shared various thoughts and resources that comprehensively describe why this shift is taking place, including Ravin Jesuthasan’s and John Boudreau’s excellent book–Work Without Jobs: How to Reboot Your Organization’s Work Operating System. But shifting to skills-based talent practices can take time, especially considering that many organizations lack insights into the skills of their workforce. One survey by the Institute for Corporate Productivity (i4cp) of over 1,300 HR and business executives found that 53 percent of respondents said their organizations have insufficient data about the current skills of their workers. To gauge the extent to which organizations are successfully shifting to skills-based talent practices, Deloitte asked 125 HR and 100 business executives worldwide to share their views. The results show that most executives report their organizations are integrating skills (at least to some extent) across eight talent practices, ranging from career development to performance management. However, only a few—somewhere between 15 percent (workforce planning) and 30 percent (careers), are using skill-based practices to a significant extent. These results suggest organizations are making inroads into becoming more skills-based but still have a way to go until skill-based talent practices fully take hold. The article’s infographic shows the eight talent practices and provides a “to and from” comparison of how organizations are incorporating skills into each practice.

The number of independent workers—those doing gig, contract, or freelance work—continues to grow. According to a new McKinsey article on independent workers, “36 percent of employed respondents—equivalent to 58 million Americans when extrapolated from the representative sample—identify as independent workers—a notable increase from the same survey’s estimate of 27 percent in 2016.” As the share of workers that prefer independent work continues to climb, the “borrow” component of strategic workforce planning (SWP) can be an increasingly viable option for meeting an organization’s talent needs. But as this 12-page Harvard Business Review Analytics Services whitepaper mentions, the effectiveness of ‘borrow’ strategies in SWP will require a strategic collaboration between HR and the Procurement function. It notes how these two functions—especially in larger organizations—still operate in silos and often lack integration of strategies. As HR and Procurement teams work together to tap into the potential of the contingent workforce, HR leaders can start by helping their Procurement partners understand 1) the organization’s workforce strategy, 2) talent needs, and 3) why the use of contingent workers might be the best option for filling those needs. It will also require Procurement teams to expand their focus beyond cost control and consider the value that contingent workers can bring to the organization. Other points are discussed.

This article shares findings from a textual analysis study of the human capital disclosures of over 3,000 unique public companies (i.e., all 10-K filers with corresponding financial data available). The analysis is based on disclosures during the first year under the SEC Human Capital (HC) regulation, which went into effect on November 9, 2020. The rule gives public firms governed by the SEC 60-90 days after their fiscal year to include HC information in their annual report. Since the reporting rule is principles-based—meaning that the SEC has given organizations broad latitude to choose which measures to include—the regulation has been criticized as not allowing investors to objectively compare the HC of different organizations. The study’s findings show disclosures are “extremely heterogeneous in terms of their length, numerical intensity, tone, readability, and similarity with peer firms.” About 18 percent of sample firms provide human capital disclosures of less than 100 words. Disclosures are not numerically intensive, except in firms with better financial performance, which provide more specific and quantitative disclosures. Overall, the findings suggest that the HC reporting of many organizations is unlikely to be adequate for investors who wish to understand a firm’s HC management practices. You can access the detailed report here. As organizations continue to evaluate which HC measures to disclose, I am resharing this bonus resource by American Progress, which includes 25 HC measures (towards the end of the article) to consider. 

MOST SHARED RESOURCE FROM LAST WEEK

Includes resources that HR Leaders can refer to as they continue to take a more active role in helping shape their organizations’ ESG strategy and initiatives.

CHRO HIRE OF THE WEEK

TWEET OF THE WEEK

BOOK RECOMMENDATIONS

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