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This draft has been recommended for its second public review by the responsible project committee. The draft is subject to modification until it is approved for publication by SHRM and ANSI.
The appearance of any technical data or editorial material in this public review document does not constitute endorsement, warranty, or guaranty by SHRM of any product, service, process, procedure, or design, and SHRM expressly disclaims such.
The comment period is forty-five (45) days from the date posted. Please return your comments as quickly as possible, so that we can pass them on to the appropriate committee for review. This feedback will be presented to the Consensus Body, which will review it on an ongoing basis. The Consensus Body will then vote on the draft standard and address any Consensus Body member concerns. Once complete, the draft standard may be presented to ANSI and may become an American National
Standard.
© July 16, 2012. This draft is covered under SHRM copyright. Permission to reproduce or redistribute all or any part of this document must be obtained from the:
Director of Standards
Society for Human Resource Management
1800 Duke Street
Alexandria, VA 22314
P: 703-535-6047
F: 703-258-6047
HRSTDS@SHRM.ORG

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ANSI-SHRM-02001.201X an American National Standard for Human Resource Management
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The information in this publication was considered technically sound by the consensus of those who engaged in the development and approval of the document at the time of its creation. Consensus does not necessarily mean that there is unanimous agreement among the participants in the development of this document.
This SHRM HR standard was developed through a voluntary consensus standards development process. This process brings together volunteers and/or seeks out the views of persons who have an interest and knowledge in the topic covered by this publication. SHRM administers the process and establishes rules to promote fairness in the development of consensus. While
SHRM may participate in the standards development discussions, it does not write the document and it does not independently test, evaluate, or verify the accuracy or completeness of any information contained in its standards publications.
SHRM is a nonprofit individual membership association with no regulatory or licensing enforcement power over its members or anyone else. SHRM has no authority to monitor or enforce compliance with the contents of this document, nor does it undertake to monitor or enforce compliance with the same. It merely publishes standards to be used as voluntary guidelines that third parties may or may not choose to adopt, modify or reject.
SHRM does not accept or undertake a duty of care to the general public regarding this HR standard. SHRM disclaims any and all liability for any personal injury, property, financial damage, or other damages of any nature whatsoever, whether special, direct, indirect, consequential, or compensatory, directly or indirectly resulting from the publication, use of, application, or reliance on this document. SHRM disclaims and makes no guaranty or warranty, expressed or implied, as to the accuracy or completeness of any information published herein, and disclaims and makes no warranty that the information in this document will fulfill any person’s or entity’s particular purposes or needs. SHRM does not undertake to guarantee the performance of any organization or its employees, products or services by virtue of this standard.
In publishing and making this document available, SHRM is not undertaking to render legal, professional or other services for or on behalf of any person or entity. Anyone using this document should rely on his or her own independent judgment or, as appropriate, seek the advice of a competent professional in determining the exercise of reasonable care in any given circumstances. Information and other standards on the topic covered by this publication may be available from other sources, which the user may wish to consult for additional views or information not covered by this publication.
©2012 Society for Human Resource Management (SHRM). No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written consent of the copyright owner.
ISBN XXXXXXXXXXXXXXX
The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 250,000 members in over 140 countries, the Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China and India.
Suggestions for improvement of this document are welcome. They should be sent to the Director of Standards, SHRM, 1800
Duke Street, Alexandria, VA 22315 or to HRSTDS@SHRM.ORG
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The Standard provides guidance on reporting human capital factors to investors. These factors provide investors with insight into select human capital factors that may deepen understanding of company performance. The Standard is intentionally lean, including a small set of relevant and practical measures; it does not aim to cover all aspects of human capital. Just as with financial data, the interpretation of the data will depend on the industry, organization size and other contextual factors. It is recognized that this is the first standard on this complex subject and it is expected that the Standard will evolve over time. v

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Workgroup Leader: Laurie Bassi, McBassi & Company
Associate Workgroup Leader: David Creelman, Creelman Research
Ronald Adler, Laurdan Associates, Inc.
Mark Adma, Empindex Ltd
Jeffrey Cherry, Diamond Back Advisors
Katharine Claytor, Delta Dental of VA
Kent Barnett, Knowledge Advisors
Stephanie Basler, Self
Andrew Botwin, Rothstein Kass
J Chris Boyd, Simply Best Practice, LLC
Holly Burkett, Principal, Evaluation Works
David Carhart, Cornell University
JoAnn Cox, MGT of America, Inc.
Michelle Deneau, Intuit, Inc.
Frank DiBernardino, Vienna Human Capital Advisors,
LLC
Mike Echols, Bellevue University
Arlene Gannon, NEFCU
Tim Giehll, MBA, eEmpACT
Kerstin Gnädig, Deutsche Bank
Angela Harris, ASQ (American Society for Quality) &
ASHconsulting
James Harvey, Erie Insurance Group
Patrick Kalke, ISHRMR at Leuphana University
Erika Karp, UBS
Brian Kelly, Mercer
Tobias Kuehr, ConMendo GmbH
Tanya Lewis, Development Raytheon Company
Scott Livanec, The University of Texas Medical
Branch
Pat Lynch, Business Alignment Strategies, Inc.
Steve McElfresh, HR Futures
Penny Meier, Ameriprise Financial
Noelle Nitz, Institute For Financial Mastery, Inc.
Flavio Passaro, Leuphana Universitaet Lueneburg
Brad Pearce, Wells Fargo
Hilger Pothmann, Goinger Kreis - Initiative Zukunft
Personal & Beschäftigung e.V.
Curtis Powell, Rensselaer Polytechnic Institute
Dr. Rebecca Ray, The Conference Board
Merryl Rees, Prudential Consultants
Jeremy Shapiro, Morgan Stanley
Madhu Sreekumar, Vinson Hall Corporation
Dave Vance, Manager Learning LLC
Ashley Walvoord, Verizon Wireless
Jeanne Wardlaw, Arlington County Government
Deborah Williams, Columbia Sportswear
Mark Bolgiano, Howard Hughes Medical Institue
Samuel Dergel, CFO2Grow
Asaad Faquir, Self
David Gentry, Qualcomm
Ann Hartwig, Cycle Gear, Inc
Bill Heck, Harlon Group
Malica Jibowu Walcolm, Viacom
Theresa Kane-Gringer, not employed at this time
Russell Klosk, Hewlett Packard
Brian McDaniel, Coca-Cola Enterprises
Daniel McMurrer, McBassi & Company
Patricia Meglich, University of Nebraska at Omaha
Sue Meisinger, Self
Amit Mohindra, Nelson Touch Consulting, LLC
Janice Presser, The Gabriel Institute
Michael Sass, Community Care Ambulance Network
Nik Shah, PricewaterhouseCoopers - Saratoga
Achim Sieker, Federal Ministry of Labour and Social
Affairs, Germany
Raymond Suarez, Quality Management International
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At the time it approved this document, the Measures and Metrics Taskforce, which is responsible for this Standard, had the following members:
Taskforce Leader: Jeremy Shapiro, Morgan Stanley
Associate Taskforce Leader: Brian Kelly, Mercer
Al Adamsen, People-Centered Strategies LLC
Ronald Adler, Laurdan Associates, Inc.
Mark Adma, Empindex Ltd
Heather Albarano, The Arora Group
Dean Altman, Service America Enterprise, Inc.
Ralph Archibald, MGT of America, Inc.
Kent Barnett, Knowledge Advisors
Stephanie Basler, Self
Laurie Bassi, McBassi & Company
Katherine Bender, Prommis Solutions
Mary Berger, Namco, LLC
Lisen Berquist, MFM, Inc
Joanne Bintliff-Ritchie, JBR and Associates
Mark Bolgiano, Howard Hughes Medical Institue
Andrew Botwin, Rothstein Kass
J Chris Boyd, Simply Best Practice, LLC
Dennis Briscoe, International Management and
Personnel Systems (IMAPS)
Elizabeth (Beth) Brooks, Highline Community College
Tyler Brown, JCSI
Holly Burkett, Principal, Evaluation Works
David Bush, Villanova University
Jennifer Cahill, Orange County Transportation
Authority
Fran Cardaci, ADP
David Carhart, Cornell University
Anand Chandarana, Consultant
Jeffrey Cherry, Diamond Back Advisors
Lauren Cole, MSL Group
Heather Coles, National Council for Architectural
Registration Boards
Sharon Consoli, The Consoli Company
Andrew Cook, TE Connectivity
JoAnn Cox, MGT of America, Inc.
Jennifer Cozier, ADP
David Creelman, Creelman Research
Leslie Crickenberger, Athens Technical College
Audrey Croley, Beneficial Bank
David D'Angelo, Federal Reserve Bank of Cleveland vii
Susanne Dahl, Northern Trust
Timothy Dahlby, The Goodman Group
Maria Dalupan, International Finance Corporation of the World Bank Group
Yolanda deJesus, American Institute of Certified
Public Accountants (AICPA)
Asya Delm, Schlumberger
Brian Deming, Federal Reserve Board
Michelle Deneau, Intuit, Inc.
Samuel Dergel, CFO2Grow
Kay Diamond, California HR Rescue, a division of
TalentWealth
Frank DiBernardino, Vienna Human Capital Advisors,
LLC
Ann Dinges, Village of Campton Hills
Eddice Douglas, SHRM Staff
Patricia Duane, American Institute of Certified Public
Accountants (AICPA)
Mike Echols, Bellevue University
Barbara Eddy, Canada Cartage
Rob Eidson, Deloitte
Asaad Faquir, Self
Robert Flores, AT&T
Marc Fournier, Core Physicians, LLC
Arlene Gannon, NEFCU
Shelly Geary, ASCD
David Gentry, Qualcomm
Tim Giehll, MBA, eEmpACT
Kim Gladbach, ACS (contract assignment)
Kerstin Gnädig, Deutsche Bank
RT Good, Shenandoah University
Roberta Goughnour, Klebs Mechanical
Jonathan Grafft, The Newman Group
Kelly Guerrero, Alpla
Linda Haft, The HR Office, Inc.
Angela Harris, ASQ (American Society for Quality) &
ASHconsulting
Ann Hartwig, Cycle Gear, Inc
James Harvey, Erie Insurance Group

AMERICAN NATIONAL STANDARD
Mike Hawn, Murphy Brown
Bill Heck, Harlon Group
Jon Helmin, M&T Bank Corporation
Kaenan Hertz, Lulustar Consulting
Irene Higgins, Sanddollar Path, LLC
Jan Hunter, John Muir Health
Malica Jibowu Walcolm, Viacom
Catherine Johnson-Komins, Menlo Worldwide
Logistics
Patrick Kalke, ISHRMR at Leuphana University
Theresa Kane-Gringer, not employed at this time
Erika Karp, UBS
Mike Kent, Jeitosa Group International
Russell Klosk, Hewlett Packard
Linda Kruso, Beaumont Hospitals
Sara Kubin, Audiology Business Services
Tobias Kuehr, ConMendo GmbH
Aaron Lambert, PricewaterhouseCoopers
Anne-Marie Lee, Novation
Tanya Lewis, Development Raytheon Company
Scott Livanec, The University of Texas Medical
Branch
Pat Lynch, Business Alignment Strategies, Inc.
Lee Mariano, SRA International, Inc.
Bruce Marks, Development Dimensions
International, Inc. (DDI)
Brian McDaniel, Coca-Cola Enterprises
Steve McElfresh, HR Futures
Ronald McKinley, The University of Texas Medical
Branch
Daniel McMurrer, McBassi & Company
Tracy McPhail, TECO Energy
Patricia Meglich, University of Nebraska at Omaha
Penny Meier, Ameriprise Financial
Sonya Merritt, Star Island Corporation
Christopher Meyers, AT&T
Amit Mohindra, Nelson Touch Consulting, LLC
Brett Morris, Patient First
Shelly Murray, East Alabama Medical Center
Muhammad Nabeel, GBS Group Holding
Edna Nakamoto, The HR Manager LLC
Noelle Nitz, Institute For Financial Mastery, Inc.
Paula Nuzzi, Evergreen Packaging
I. Godwin Otu, Self
Dan Oyler, TMEIC-GE Automation Systems, LLC
Mustafa Ozbilgin, Norwich Business School
Judith Parker, Acme Cryogenics
Flavio Passaro, Leuphana Universitaet Lueneburg
Brad Pearce, Wells Fargo
Bert Pereboom, IBM Global Business Services
ANSI-SHRM-02001.201X viii
Anthony Perez, Children's Medical Center Dallas
Hilger Pothmann, Goinger Kreis - Initiative Zukunft
Personal & Beschäftigung e.V.
Curtis Powell, Rensselaer Polytechnic Institute
Janice Presser, The Gabriel Institute
Dori Ramsey, Washington Gas
Katherine Rawe, Employee Management Services
Dr. Rebecca Ray, The Conference Board
Merryl Rees, Prudentia Consultants
Romuald Restout, Arbita
Karyn Rhodes, Cornerstone Group
Jennifer Riddick, Rex Healthcare
Ursula Roesler, Planned Parenthood Arizona
Carla Romero-Erlanson, Yukon-Kuskokwim Health
Corporation
Cai Rong, Transocean
Alexander Ruch, Amway
Shreya Sarkar-Barney, Human Capital Growth, INC.
Michael Sass, Community Care Ambulance Network
Catherine Savage, Klepper, Hahn & Hyatt
Randi Schoenfelder, Theodolite Human Capital
Thomas See, Tom See & Associates
Nik Shah, PricewaterhouseCoopers - Saratoga
Achim Sieker, Federal Ministry of Labour and Social
Affairs, Germany
Brian Silva, Fresenius Medical Care
Steve Smrcina, Holcim (US) Inc.
Jan Soran, JCIII & Associates, Inc.
Roger Spayer, Illinois Mathematics and Science
Academy
Madhu Sreekumar, Vinson Hall Corporation
Raymond Suarez, Quality Management International
Patricia Swedin, Dow Jones & Company
Mark Sweeny, Empindex Ltd
Dianna Tafazoli, DBK Associates, LLC
Linda Teresi, Tampa Electric Company
Jeffrey Thomas, A.T. CROSS COMPANY
Paula Thorn, WVU Healthcare
Hilde Van Gool, Walt Disney Animation Studio
Dave Vance, Manager Learning LLC
Dennise Vaughn, Edward Hospital and Health
Services
Robert Von Der Linn, Change Leadership Resources,
LLC
Ashley Walvoord, Verizon Wireless
Jeanne Wardlaw, Arlington County Government
Kimberly Weber, University Hospitals
Ron Weigelt, Seattle King County Public Health
Theresa Welbourne, eePulse, Inc.
Jason Whitman, Indeed

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Deborah Williams, Columbia Sportswear
John Winchell, American Airlines
Katharine Claytor, Delta Dental of VA
SHRM HR STANDARDS SECRETARIAT STAFF
Lee Webster Director, HR Standards
Amanda Benedict Manager, HR Standards
Eddice Douglas Coordinator, HR Standards
ANSI-SHRM-02001.201X
Melissa Mason, Cox Communications
Sue Meisinger, Self
Kathy Slack, AMP, Inc.
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NOTICE and DISCLAIMER ............................................................................................................................. iv
About SHRM ............................................................................................................................................. iv
Abstract ......................................................................................................................................................... v
Workgroup Members................................................................................................................................... vi
Taskforce Members .................................................................................................................................... vii
Contents ........................................................................................................................................................ x
1.0 Scope, Summary, Purpose and Interpretation ....................................................................................... 1
1.1 Scope ................................................................................................................................................... 1
1.2 Purpose ............................................................................................................................................... 1
1.3 Interpretation...................................................................................................................................... 1
2.0 Executive Summary ................................................................................................................................. 3
2.1 Introduction for Investors .................................................................................................................. 3
2.2 Introduction for Corporations ............................................................................................................ 3
2.4 Relationship with Other Standards .................................................................................................... 3
3.0 Human Capital Measures ........................................................................................................................ 4
3.1 Implementation Guidelines ................................................................................................................ 4
3.2 Sample Report Format ........................................................................................................................ 5
3.2.1. ......................................................................................................................................................... 5
Human Capital Spending ........................................................................................................................... 5
3.2.2. Ability to Retain Talent ................................................................................................................... 5
3.2.3. Leadership Depth ............................................................................................................................ 5
3.2.4. Leadership Quality .......................................................................................................................... 5
3.2.5. Employee Engagement ................................................................................................................... 5
3.2.6. Human Capital Discussion and Analysis .......................................................................................... 5
4.0 Instructions for Reporting on Human Capital Spending ......................................................................... 6
4.1 Objective ............................................................................................................................................. 6
4.2 Measures ............................................................................................................................................. 6
4.2.1 Direct Employee Compensation Costs ......................................................................................... 6
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4.2.2 Costs for Third Party Employees .................................................................................................. 7
4.2.3 Investment in Training & Development .......................................................................................... 7
4.2.3.4 Headcount Regular and Third Party Workers(FTE) ....................................................................... 8
4.3 Sample Reporting Format ................................................................................................................. 99
5.0 Instructions for Reporting on Retaining Talent ................................................................................... 10
5.1 Concept ............................................................................................................................................. 10
5.2 Measures .......................................................................................................................................... 10
5 .............................................................................................................................................................. 11
.3 Instructions ........................................................................................................................................ 11
5.3.1 Calculating Voluntary Turnover ..................................................................................................... 11
5.3.2 Calculating Total Turnover ............................................................................................................ 11
5.4 Guidelines for Handling Non-US turnover data ................................................................................ 11
5.5. Sample reporting format ................................................................................................................. 12
7.0 Instructions for Reporting on Leadership Quality ................................................................................ 15
7.1 Objective ........................................................................................................................................... 15
7.2 Measure ........................................................................................................................................... 15
7.3 Instructions for Calculating Leadership Quality Index ..................................................................... 15
7.4.1 Step 1: Questionnaire ............................................................................................................... 15
7.4.2 Step 2: Calculation .................................................................................................................... 16
7.4.3 Alternatives ............................................................................................................................... 16
7.5 Guidelines......................................................................................................................................... 16
7.6. Sample Reporting Format ................................................................................................................ 17
8.0 Instructions for Reporting on Employee Engagement ......................................................................... 18
8.1 Objective .......................................................................................................................................... 18
8.2 Measure ........................................................................................................................................... 18
8.3 Instructions for Calculating Engagement Index ............................................................................... 18
8.3.2 Step 2: Calculation .................................................................................................................... 19
8.3.3 Alternatives ............................................................................................................................... 19
8.4 Guidelines......................................................................................................................................... 19
8.6. Sample Reporting Format ................................................................................................................ 21
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Employee Engagement ........................................................................................................................... 21
9.0 Instructions for Human Capital Discussion & Analysis (HD&A) ........................................................... 22
9.1 Objective .......................................................................................................................................... 22
9.2 Instructions for Writing the HD&A ................................................................................................... 22
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The Standard provides guidance on reporting human capital factors to investors. These factors provide investors with insight into select human capital factors that may deepen understanding of company performance. The Standard is intentionally lean, including a small set of relevant and practical measures; it does not aim to cover all aspects of human capital. Just as with financial data, the interpretation of the data will depend on the industry, organization size and other contextual factors. The measures provided may be useful to understand organizational performance regardless of capital structure (public, private, etc.).
Human capital has a material impact on organizational performance and thus is of interest to investors.
Establishing credible and durable measurements of human capital creates a more complete picture of the capability of an organization to create value for customers and shareholders. While the subject of human capital and performance is broad, and has some aspects that are difficult to measure, there are a number of measures that can help investors understand strengths, risks, or ask more informed questions regarding an organization. This Standard provides guidance on a core set of relevant and practical human capital measures.
Just as with financial data, the interpretation of the data will depend on the industry, organization size and other contextual factors. Rather than focusing solely on the metrics, stakeholders may find it helpful to see the Standard as identifying key topics for inquiry supported with metrics.
By creating a common set of topics and measures, the Standard is designed to help stakeholders get the data they need, which, over time, may lead to a deeper understanding of how human capital impacts the performance and future value of an enterprise.
To achieve consistent application of this Standard, suggestions involving changes in the requirements or disputes over its interpretation shall be referred to the following organization:
HR Standards Secretariat
Society for Human Resource Management (SHRM)
1800 Duke Street
Alexandria, VA 22314
Fax: 703-962-7807
E-mail: HRSTDS@SHRM.ORG
Website: http://www.shrm.org/hrstandards
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If your inquiry requires an interpretation of the Standard, the inquiry must be submitted in writing and
SHRM will forward the inquiry to the appropriate Standard’s taskforce leader for a taskforce response.
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Research indicates that human capital has an impact on organizational success. While many aspects of human capital are hard to measure, there are some important aspects of it that are readily measured. This
ANSI Standard provides guidelines for reporting on these human capital metrics. In some cases the metrics will simply confirm what investors already know about a company; in other cases they will provide evidence of underlying strengths or risks that might otherwise be overlooked.
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The indicators of human capital included in the Standard consist of a small set of metrics that are relevant to investors, and have been designed to be produced with some practicality, recognizing that not all organizations possess the same systems of record to produce this data. It is important to note that the disclosures described in this document are voluntary.
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Human capital is important to all kinds of organizations (e.g. non-profits, government, privately owned firms, cooperatives), not just corporations. Anyone with an interest in the overall health of an organization
(e.g. donors, leadership, boards) may be interested in the information covered in this Standard.
Every attempt will be made to keep this Standard consistent with other relevant standards, and it will be updated as needed.
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To comply with the Standard organizations should report on measures in the following six areas.
Section 4: Human capital spending. The objective of these metrics is to describe spending on each major type of human capital, including full-time, part-time and third party employees.
Section 5: Ability to retain talent. The objective of the retention metric is to provide a potentially important indicator of organizational capability and health.
Section 6: Leadership depth. The objective of the leadership depth metrics is to evaluate an organization’s preparation for and success at managing both planned and unplanned leadership succession.
Section 7: Leadership quality. The objective of the leadership quality metric is to gain insight into whether the organization has effective leadership practices throughout the organization by gathering data in a systematic way from employees.
Section 8: Employee engagement. The objective of the engagement metric is to gain insight into whether employees are engaged in their work by gathering data in a systematic way from employees.
Section 9: Human capital discussion & analysis. The objective of the human capital discussion & analysis is to provide management with an opportunity to connect the dots and to provide investors with an enterprise-wide perspective of the meaning and importance of the various human capital metrics.
1.
Since this is a voluntary disclosure, an area may be skipped, provided a reason for doing so has been disclosed.
2.
Organizations may wish to include breakdowns of these metrics by unit or region; the HD&A section provides an opportunity for organizations to provide additional detail or context in this regard.
3.
Organizations that find other components of their human capital expenditure to be of particular importance in enabling innovation, growth, and the productivity of their workforce may choose to provide additional detail on those components. Investments in key HR systems, processes, or programs might be examples.
4.
Information must be sourced from the appropriate system of record (e.g. an organization’s payroll system, financial general ledger, or accounts payable records for cost data, or performance management system for successor data).
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3.2.1.
Human Capital Spending
(A) Direct Total Compensation Costs
(B) Costs of Third Party Employees
Human capital expenses (A+B)
(C) Investment in training & development
(D)Total regular employee FTE
(E)Total third party employees FTE (if available)
Total FTE (D + E)
3.2.2. Ability to Retain Talent
EEO Category
Executive/Senior Level Officials and
Managers
Voluntary Turnover
$_______________
$_______________
$_______________
$_______________
_______________
_______________
_______________
Total Turnover # of Employees
First/Mid-Level Officials and Managers
Professionals
Technicians
Sales Workers
Other
TOTAL
3.2.3. Leadership Depth
Number of relevant leadership positions:
Percentage of relevant leadership positions with an identified successor:
Percentage of relevant leadership positions filled internally: _____
Criteria for identifying Relevant Leadership Positions: _________________________
(e.g. "VP and above", “EEO-1 category Executive/Senior Level Official and Managers”)
_____
_____
3.2.4. Leadership Quality
Leadership Quality Rating: ___/100
3.2.5. Employee Engagement
Employee Engagement Rating: ___/100
% of Employees who completed survey _____
Questions used to determine rating
_______________________________
_______________________________
_______________________________
_______________________________
% of Employees who completed survey _____
Questions used to determine rating
_______________________________
_______________________________
_______________________________
_______________________________
Method of calculating rating (e.g. average of all leadership questions)
_______________________________
Method of calculating rating (e.g. average of all engagement questions)
_____________________________
3.2.6. Human Capital Discussion & Analysis
_______________________________________________________________________________________
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The objective of this metric is to quantify and bring clarity to an organization’s total expenditure on talent.
While all of these cash outlays are a part of the general ledger account details, they are typically not separated out in standard financial reporting and are usually treated as expenses against the income statement. Providing additional detail on this spending/investment can assist investors in evaluating an organization’s capability to create value for customers and shareholders. This information can be sourced from an organization’s payroll system, financial general ledger, and accounts payable records.
The inclusion of the headcount/FTE metric in this section provides a critical level of organizational detail that can be used in performance analysis.
The “spending on human capital” metric is based on two types of expenditures:
1.
Direct Total Compensation Costs
2.
Costs of Third Party Employees
Training and development spending – the element of human capital spending that is most clearly an investment in an organization’s future productivity – is also to be reported as an additional standalone item.
Headcount/FTE numbers should also be reported in this section.
4.2.1 Direct Total Compensation Costs
The items in this section are related to compensation of full-time and part-time employees and are found in the organization’s system of record. Organizations may choose to segregate these costs between managers and individual contributors for deeper analysis.

Salaries

Bonuses

Incentive Payments

Commissions

Overtime

Stock Options/Awards

Retirement/401K Matches

Pensions

Health Insurance

Other Insurance

Payroll tax
6

333
334
335
336
337
338
339
340
341
342
343
344
345
346
347
348
349
358
359
360
361
362
363
364
365
366
367
350
351
352
353
354
355
356
357
AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
4.2.2 Costs for Third Party Employees
The items in this section are related to all third party related employee expenses and are paid to vendors.
These costs are found in the Accounts Payable or General Ledger details of the organization’s financial system.

Employee Leasing expenses

Temp (agency) worker invoices

Independent 1099 contractor costs

Consultant costs

Costs related to contractual multi-year outsourcing
4.2.3 Investment in Training & Development 2
Total spending for learning includes formal learning, work-based learning, and the learning function’s contribution to non-training performance improvement solutions. Much of spending on Training and
Development is already included in the two cost categories above. The reason for also identifying this spending separately is that it provides a means for analysts to focus on an investment that an organization is making in the future productivity of its workforce. This includes:

Compensation cost of learning and performance employees (as defined in 4.2.1)

Costs for third party learning and performance employees (as defined in 4.2.2)

Travel costs for learning and performance staff

Non-salary delivery costs (classroom facilities, online infrastructure, computers, etc.)

External purchases (such as software, courseware)

Tuition reimbursements
4.2.3.1
Out of Scope: Investment in Training & Development
Because of difficulties in consistently tracking and accounting for some components of investments in training and development, the following categories of expenditures should be excluded:

Learners' travel expenses

Costs of participants' conference attendance, fees, and travel

Cost of lost work time while engaged in formal learning activities

Costs of internal subject matter experts' time for content analysis, coaching, and knowledge sharing
2
This method of calculating investment in training and development is based on a definition created by the ASTD through a consortium of its corporate members.
7

AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
368
369
370
371
372
373
374
375
376
387
388
389
390
391
382
383
384
385
386
377
378
379
380
381
392
393
394
395
396

Total Regular Employee FTE o Direct W-2 headcount is defined as the sum of all full-time and part-time employees whose status group in the HRIS system of record is “active” and includes: Active, Paid Leave, and
Unpaid Leave employees. o FTE is a metric used to measure and normalize full-time/part-time employees based on hours reported. It is defined as total hours reported divided by the maximum number of compensable hours in a full-time schedule (usually 40 hours per week).

Total Third Party FTE 3 o Third Party Employees may be referred to by a variety of terms, including Temporary Staff,
Leased Employees, Contractors, and occasionally Consultants. Third Party Employees include individual resources hired to accommodate capacity needs and/or a gap in skill set for a limited period of time. o Third Party Employees Headcount (if available) is defined as the sum of all Third Party
Employees, NOT covered under the corporation’s W-2 including: 1099 contractors, leased employees, temp (agency) workers, consultants, and outsourced workers (provided that the consultants or outsourced workers are spending most of their time on the organization’s work). o Third Party Employees also includes “outsourced” workers and departments such as help desks, software development and customer service (provided that the outsourced workers are spending most of their time on the organization’s work). Outsourced services such as building contractors and cleaning services, and manufacturing suppliers should not be included in the organization’s headcount. o Third Party Employees also includes individuals and/or teams of consultants that are contractually hired to perform a function or to produce a deliverable that is subject to acceptance criteria as defined in a Statement of Work (provided that the consultants are spending most of their time on the organization’s work).
3 It is understood that the ability to collect data and to report on Third Party Employees Headcount and FTEs may not currently be feasible for all organizations. It is expected that the capacity to do so will improve in the future with improvements in software.
8

AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
397
398
399
400
401
402
403
404
405
406
407
408
409
410
411
412

Total FTE o Total FTE is defined as the sum of the FTE for all the included Employees and Third Party
Employees (if available).

Out of Scope: Service level arrangements where Vendor’s headcount is not easily attainable should not be counted (e.g., when an organization outsources payroll).
Human Capital Spending
(A) Direct Total Compensation Costs
(B) Costs of Third Party Employees
Human capital expenses (A+B)
(C) Investment in training & development
(D)Total regular employee FTE
(E)Total third party employees FTE (if available)
Total FTE (D + E)
$_______________
$_______________
$_______________
$_______________
_______________
_______________
_______________
9

413
AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
414
415
416
417
418
The objective of the retention metric is to provide some detail on organizational attrition. For example, an inability to retain talent may compromise an organization’s ability to achieve its goals. Furthermore, increases in turnover may signal that employees lack confidence in the organization.
419
436
437
438
439
440
426
427
428
429
430
431
432
433
420
421
422
423
424
425
434
435
441
442


Voluntary turnover rate by major job categories
Total turnover rate by major job categories
Major Job Categories
Both voluntary and total turnover should be reported for:

The organization as a whole

For the following job categories used in the Employer Information Report EEO-1 (EEO-1 Report) 4
1.
Executive/Senior Level Officials and Managers
2.
First/Mid Level Officials and Managers
3.
Professionals
4.
Technicians
5.
Sales Workers
6.
Other (combined remaining EEO-1 categories)
ry turnover
Voluntary turnover includes any turnover that is initiated by the employee. This includes, for example, resignation, job abandonment, normal retirement and acceptance of early or enhanced retirement packages. Voluntary termination does not include any termination that is due to death or initiated by the employer such as discharge or a reduction in force.
Total turnover
Total turnover includes all turnover, regardless of reason.
4 See the EEOC website for more detail: http://www.eeoc.gov/employers/reporting.cfm
10

AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
443
444
445
446
447
448
449
450
451
452
453
454
5.3.1 Calculating Voluntary Turnover
Voluntary turnover = (# of employees in the category who voluntarily left the organization over the fiscal period) / (Average # of employees in that category over the fiscal period)
5.3.2 Calculating Total Turnover
Total turnover = (Total # of employees in the category who left the organization over the fiscal period) /
(Average # of employees in that category over the fiscal period)
The total number of employees for the EEO-1 job categories noted above should be included in the report.
Note: If an EEO-1 category has so few employees that turnover numbers may not be statistically meaningful, they do not need to be reported for that category. Although there is no hard and fast rule for determining what constitutes a sufficiently large group, a rough rule of thumb is that if there are fewer than 30 employees the category is too small for reporting.
455
456
457
458
459
460
461
462
Outside of the US, employee data is unlikely to be coded with the EEO-1 categories. This leaves organizations with three options for reporting turnover among these employees:
1.
Simply report totals (no breakdowns)
2.
Report by a similar categorization that exists in that country
3.
Code all employee data globally with the relevant EEO-1 categories
While the third option is the best for providing comparable data, it may not always be practical.
11

AMERICAN NATIONAL STANDARD
463
464
465
466
EEO Category
Executive/Senior Level Officials and
Managers
First/Mid Level Officials and
Managers
Professionals
Technicians
Sales Workers
Other
TOTAL
Voluntary Turnover
ANSI-SHRM-02001.201X
Total Turnover # of Employees
12

467
AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
471
472
473
474
475
468
469
470
476
488
489
490
491
492
493
494
495
496
497
482
483
484
485
486
487
477
478
479
480
481
The objective of the leadership depth metrics is to evaluate an organization’s preparation for and success at managing both planned and unplanned leadership succession.
The percentage of relevant leadership positions where there is one or more qualified and available successor
The percentage of relevant leadership positions filled internally during the last fiscal period
Relevant Leadership Positions
It is up to each organization to decide which positions are “Relevant leadership positions” for the purpose of reporting Leadership Depth. At a minimum this set should include positions in the EEO-1 category
“Executive/Senior Level Official and Managers.” It may be extended beyond that and may include key positions where succession is critical.
Number of Positions
The number of relevant leadership positions should be reported as of the last day of the reporting period.
New positions created during the period and positions that are the results of a merger or acquisition during the reporting period should be included. For consistency of reporting period-over-period, positions filled during the period should also be included even if there has not been sufficient time to fully develop a new successor.
Positions with Successor
A relevant leadership position has a successor if one or more qualified people are available to move to that position should it be vacated.
Filled Positions
Any relevant leadership position that became vacant during the period and was subsequently filled counts as a filled position. Positions that were filled multiple times during the period should be counted multiple times. New positions created during the period or that result from a merger or acquisition should not be counted. Positions that are open and unfilled at the end of the period do not need to be counted.
13

503
504
505
506
507
508
509
510
511
512
513
514
515
498
499
500
501
502
AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
Internally Filled
A position is internally filled when an existing employee of the organization, a subsidiary, or related organization fills the open position. Planned external successions, a contract-to-hire consultant for example, are considered external hires and should not be considered as internally filled.
6.4.1 Calculating the percentage of relevant leadership positions with an identified successor
Identify the number of relevant leadership positions at the end of the reporting period. (Number of
Positions)
Identify the number of relevant leadership positions that have at least one identified successor at the end of the reporting period. (Positions with Successor)
Percentage of Relevant Leadership Positions with an Identified Successor = (Positions with Successor) /
(Number of Positions)
6.4.2 Calculating the percentage of relevant leadership positions filled internally
Identify the number of relevant leadership positions filled during the reporting period. (Filled Positions)
Identify the number of relevant leadership positions filled internally during the reporting period. (Internally
Filled)
Percentage of relevant leadership positions filled internally = (Internally Filled) / (Filled Positions).
521
522
523
524
525
526
516
517
518
519
520
The use of successor pools makes reporting leadership depth harder because there is not a clear one-toone relationship between the leadership positions and successors. Organizations that do not use
Replacement Planning should report their estimate of how many Relevant Leadership Position openings will be filled by internal candidates.
Number of relevant leadership positions:
Percentage of relevant leadership positions with an identified successor:
_____
_____
Percentage of relevant leadership positions filled internally: _____
Criteria for identifying Relevant Leadership Positions: __________________________
(e.g. "VP and above", “EEO-1 category Executive/Senior Level Official and Managers”)
527
528
14

529
AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
536
537
538
539
540
541
542
543
544
545
546
547
548
549
550
551
552
553
530
531
532
533
534
535
The objective of the leadership quality metric is to gain insight into whether the organization has effective leadership practices throughout the organization by gathering data in a systematic way from employees.
An index based on results from a set of relevant questions on an employee survey.
The Leadership Quality index should be based on a set of survey questions that cover issues such as 5 :

Vision - do leaders promote a convincing shared vision?

Alignment - are leaders providing clear direction that links individual efforts to strategic direction?

Drive for success - do leaders push to achieve challenging 'stretch' goals?

Collaboration - do leaders create a collaborative atmosphere and listen to input from employees?

Innovation – do leaders create an environment that is open to new ideas?

Leadership Competence – do leaders inspire confidence in employees?
There are many ways of using employee questionnaires to calculate a leadership quality index. This
Standard prescribes that organizations disclose an appropriate index of similar leadership questions, and disclose the questions asked. The Standard does not prescribe the exact questions to be asked, nor the methodology or technology of collection or analysis of the data.
7.4.1 Step 1: Questionnaire
Employees fill in a questionnaire. The questions should have been tested to ensure that there is a correlation with important business outcomes.
Example:
Please indicate the extent of to which you agree or disagree with each statement using the following scale:
554
Strongly Agree
1
Agree
2
Neutral
3
Disagree
4
Strongly Disagree
5
5 Questions below provided as an example only, the organization may disclose appropriate questions from their own survey.
15

AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
569
570
571
572
573
574
575
576
577
578
579
563
564
565
566
567
568
555
556
557
558
559
560
561
562
 Corporate top management has a clear and compelling vision for the future.  1 2 3 4 5
 My department’s goals and objectives are aligned with the strategic direction of the company.
 1 2 3 4 5
 In my department we are continually looking for ways to improve performance.  1 2 3 4 5
 1 2 3 4 5  Leaders in my department seek and use input from employees in making decisions and plans.
 The organization is open to new ideas and better ways of doing things.
 Leadership is taking the organization in the right direction.
 1 2 3 4 5
 1 2 3 4 5
7.4.2 Step 2: Calculation
Normally the calculation of a leadership quality index will be a simple average, however, an organization may use a different method if disclosed.
Example: If each employee has a series of responses such as: 4,4,3,5,4,2 In this case the leadership quality based on that one employee would be (4+4+3+5+4+2)/6 = 3.7. The leadership quality index for the organization would be the average of all individual employee scores. That is the index which should be reported.
7.4.3 Alternatives
This example is illustrative rather than prescriptive. The important point is to have a clear and defensible methodology and be ready to answer investor questions about the reason you chose that particular methodology.

Comparability: While standardizing on a single method would be ideal, it would be premature to do so at this time. Over time investor pressure will lead to convergence on methods whose results can be compared. Those organizations that chose a non-standard methodology will be able to show investors changes over time, but their metrics will not be directly comparable to other organizations.

Validity: Organizations should select a method where there is evidence that the results are correlated with important business outcomes and it is not unreasonable to presume there is causality (or ”reciprocal causality” where good leadership quality scores tend to lead to good business outcomes and good business outcomes lead to good leadership quality scores).

Transparency: Organizations should report the questions asked, the method used for calculating the index, and the percent of employees who responded to the survey.
16













AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
580
581
582
583
586
587
588
589
590
591
592
593
594
595
596
597
598
599
600
601

Consistency over time: The same index should be used from report to report. If the organization chooses to change the index then they should report on Quality of Leadership using both the new and old method in the year they make the change.

Scope: The survey should cover a broadly representative sample of employees.
Leadership Quality Rating: ___
% of Employees who completed survey _____
Questions used to determine rating
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Method of calculating rating
_______________________________
_______________________________
17

602
AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
609
610
611
612
613
614
615
616
617
618
619
620
621
622
623
624
625
626
603
604
605
606
607
608
The objective of the engagement metric is to gain insight into whether employees are engaged in their work by gathering data in a systematic way from employees.
An index based on results from a set of relevant questions on an employee survey.
The Engagement index should be based on a set of survey questions that cover issues that drive employee engagement, as well as summary measures of employee engagement such as:
1.
Goal setting - do employees have clear goals?
2.
Support – are employees given the support needed to achieve their goals?
3.
Development - are employees given the support needed to develop their abilities?
4.
Work Processes – does employees’ work environment support the organization’s goals?
5.
Commitment - are employees committed to the organization?
There are many ways of using employee questionnaires to calculate an engagement index. This Standard prescribes that organizations disclose an appropriate index of similar leadership questions, and disclose the questions asked. The Standard does not prescribe the exact questions to be asked, nor the methodology or technology of collection or analysis of the data.
8.3.1 Step 1: Questionnaire
Employees fill in a questionnaire. The questions should have been tested to ensure that there is a correlation with important business outcomes.
Example:
Please indicate the extent of to which you agree or disagree with each statement using the following scale:
Strongly Agree
1
Agree
2
Neutral
3
Disagree
4
Strongly Disagree
5
18

AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
629
630
631
632
633
634
635
636
637
638
639
645
646
647
648
649
650
640
641
642
643
644
651
652
653
654
I have a clear understanding of what is expected or me in my job.
I have access to the resources necessary to do my job well.
I have opportunities to gain new skills or extend skills I already have.
Processes are in place that help me get my work done efficiently and effectively.
If I were offered a position with similar pay and benefits at another company, I would stay at my company.
8.3.2 Step 2: Calculation
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
Normally the calculation of an engagement will be a simple average. Each employee would have a series of responses such as: 5,4,3,5,4 In this case the engagement for that one employee will be (5+4+3+5+4)/5 =
4.2. The engagement index for the organization would be the average of all individual employee scores.
That is the index which should be reported.
8.3.3 Alternatives
This example is illustrative rather than prescriptive. The important point is to have a clear and defensible methodology and be ready to answer investor questions about the reason you chose that particular methodology.

Comparability: While standardizing on a single method would be ideal, it would be premature to do so at this time. Over time investor pressure will lead to convergence on methods whose results can be compared. Those organizations that chose a non-standard methodology will be able to show investors changes over time, but their metrics will not be directly comparable to other organizations.

Validity: Organizations should select a method where there is evidence that the results are correlated with important business outcomes and it is not unreasonable to presume there is causality (or ”reciprocal causality” where good engagement scores tend to lead to good business outcomes and good business outcomes lead to good engagement scores).

Transparency: Organizations should report the questions asked, the method used for calculating the index, and the percent of employees who responded to the survey.

Consistency over time: same index should be used from year (period) to year (period). If the organization chooses to change the index then they should report on engagement using both the new and old method in the year they make the change.

Scope: The survey should cover a broadly representative sample of employees.
19

657
658
AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
20

659
660
661
662
663
664
665
666
667
668
669
670
671
672
673
674
675
AMERICAN NATIONAL STANDARD
Employee Engagement
Employee Engagement Rating: ___/100
% of Employees who completed survey _____
Questions used to determine rating
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
Method of calculating rating (e.g. average of all engagement questions)
_______________________________
ANSI-SHRM-02001.201X
21

676
677
AMERICAN NATIONAL STANDARD ANSI-SHRM-02001.201X
678
679
680
681
682
683
684
685
686
687
688
689
The objective of the Human Capital Discussion & Analysis is to provide management with an opportunity to connect the dots and to provide investors with an enterprise-wide perspective of the meaning and importance of the various human capital metrics.
The HD&A section should provide insight that will help investors interpret the metrics. In addition, this is where the organization should disclose any other material information related to human capital, including any material risks.
22