While politicians in the US and the UK might share a “special relationship”, how much do our respective HR professions truly have in common? This is a question coming to the fore over the next few months, as proposals for the first US HR quality standard to become internationalised are put to a vote in September.
In March this year, the American National Standards Institute (ANSI) approved its first HR-related standard – the cost-per-hire standard – after three years of development work with the US Society for Human Resources Management (SHRM). The result is a 50-page document aimed at helping organisations to calculate their recruitment costs through an “accepted algorithm”. Announcing the launch of the standard, Lee Webster, SHRM’s director of HR standards, said: “The HR profession and its stakeholders can now begin to make business decisions based on credible, transferable and inter-operable human capital analytics.”
But what does the introduction of this standard mean for UK HR practitioners, many of whom will already operate their own cost-per-hire calculations based on the needs of their business? If the committee of the International Organisation for Standardisation (ISO) votes in favour of giving the ANSI standard international status, then multi-national companies, or those with multinational supply chains, could see the standard enforced in certain procurement processes as a requirement. Even if it remains purely US focused, organisations headquartered in the US with offices around the world may find themselves being asked to comply.
“Most countries are members of ISO, so since the standards debate has kicked off from the US, those countries must now think about their response,” explains Paul Kearns, principal expert on standards for the British Standards Institution (BSI) – the UK’s national standards body, and a consultant on evidence-based HR. “If you’re a multinational company, this could really affect your HR practices.” An additional concern is that, if ANSI proposes more standards in this vein, which are then accepted by ISO, HR might be required to deal with a lot more paperwork in the long term.
The BSI has been discussing HR management standards with influential industry experts such as the Chartered Institute for Personnel and Development (CIPD) and the Institute of Directors. “We want to make sure that the UK’s voice is heard and that UK HR professionals have an influence on what that standard is, if it’s accepted by ISO,” says Sara Walton, committee manager for standards development at the BSI. “The UK has a mature HR industry, characterised by a lot of best practice and knowledge.”
What, more standards?
The US Society for Human Resource Management has certainly been busy in terms of standards development, with another proposed standard for what companies should disclose about human capital currently in a consultation period. It is hoped that the American National Standards Institute will approve the proposed human capital metrics standard later this year. The idea is that organisations should publicly disclose how much they invest in their people – from spending on training and development to their ability to retain talent.
But despite being well intentioned, the proposal has come under fire. Organisations could potentially report data in different ways, making the value of having such a standard questionable. Many analysts also question the amount of time that will be required to put together all of the data.
Watch this space.
Walton points out that, if the BSI was to pioneer the development of a series of standards in this area, the initial focus would be regarding common terminology, so that all organisations would be able to operate on the same level when discussing their activities. She adds that the reaction from European member bodies has been: “We would welcome practical guidance and a standard that could be used as an everyday management tool.”
Stephanie Bird, director of HR capability at the CIPD, has been working with the BSI on representing the best interests of the institute’s members. She is concerned that UK HR professionals will find it too technical and prescriptive. “I don’t have a problem with standards per se. Metrics can show the value added. But if you look at the cost-per-hire standard they’ve drawn up, it’s even had some pushback in the US. It’s like using a sledgehammer to crack a nut,” she says.
“When I worked at Dell, we used metrics such as cost-per-hire when we were setting up a new call centre, for example. But we knew why it was important – we didn’t need an artificial description of what cost-per-hire should look like for us.”
At a recent meeting of the European Association for People Management, which has 31 delegates, many members were circumspect about ANSI’s approach, according to Bird. “It’s out of kilter with the state of the profession in most countries,” she adds. “There’s a wariness about the extra bureaucracy they could do without.”
Bureaucracy aside, is measurement generally not a good thing in terms of HR showing it can add value? “The thing about human capital management is that organisations choose the measures that matter to them,” says Bird.
Kearns agrees that a simple metric does little to enlighten organisations about their HR practice: “Cost-per-hire is just the average cost of recruiting someone. It does not tell you whether that person is of sufficient quality to do their job effectively. Nor does it tell you anything about their subsequent performance.”
The CIPD would be in favour of standards that were more based on principles, says Bird. “That way you could pick what was important to your organisation. The CIPD’s profession map encourages people to look at how HR adds value to the organisation, but it’s an aspiration, rather than a straitjacket.” Of course, all standards are voluntary – organisations can be accredited in them and be registered as meeting them – but the worry is that they could become a requirement or an expectation by stealth.
Evidence shows, however, that adopting and implementing quality standards can have a positive effect on business. A study by the Department of Trade and Industry found that standards as a whole make a value contribution of £2.5 billion to the UK economy, and that the quality management system standard, ISO 9001, has been adopted by more than one million organisations in 178 countries. “[Standards] have been shown to benefit businesses in many areas, by helping them embed best-practice frameworks and processes into the way they work, be that reducing risk, behaving more sustainably or performing more efficiently and effectively,” says Walton.
The ISO’s meeting on the cost-per-hire standard will coincide with the World Federation of People Management Associations’ annual conference in Melbourne at the end of September. In the meantime, HR professionals interested in voicing their opinion on the development of standards should get in touch with either the CIPD or can contact Walton direct. “The more the UK can do at this stage to influence the development of these proposed new ISO standards, the better,” concludes Walton.