How Standards Are Essential to Strategic HR

2020 was a watershed for human resources. When the Securities and Exchange Commission mandated human capital disclosure requirements for publicly traded companies, it elevated human resources to a new level of strategic value. 2020 also saw international finance giant Deutsche Bank release a statement on why they chose to follow the International Organization for Standardization’s standards to further their strategic HR goals.

“This is a form of stakeholder recognition that is a game-changer,” says Brad Boyson, co-founder of HR Learn In and an expert on ISO TC 260, which is responsible for the development of a series of standards for HR management processes and practices. “It’s a really big tipping point in the practice of HR globally.”

Here’s how the standards are changing the game for HR professionals and validating strategic HR’s business value to the organization.

A Profession, Not Just a Person

HR has moved into value-adding business roles, and HR standards validate that process. A set of generally accepted principles codifies professional practices and creates a baseline from which to work. “Without principles, the way you get a seat at the table is through your individual credibility,” Boyson says. “You personally have to develop credibility amongst your boss, your peers.”

Boyson notes that’s not how professionals in other industries establish their standing. Indeed, think of what a struggle it would be for the medical and legal professions if each doctor and lawyer had to personally establish the credibility of their field, instead of being able to point to their universally acknowledged credentials and experience. Professions need to be bigger than a single individual, and accepted principles make this possible.

Wilson Wong, Ph.D, chair of BSI’s Human Capital Standards Committee and ISO TC 260 expert, says HR’s professionalization journey largely involves coming to an agreement on an underlying code. With the SEC recommending the ISO’s human capital reporting standard (ISO 30414) for baseline methods and processes, it’s clear we’ve traveled a long way.

Create a Chance for Continuous Improvement

One of the greatest benefits of standards is they establish a model for continuous improvement with a feedback loop. With a baseline, it’s easier to see where and how strategic HR can improve your processes. “These standards help HR professionals and guide their planning efforts,” says Sandra Miles, Ph.D, Hutchens Distinguished Professor at Murray State University and a standards development subject-matter expert for HRCI®.

HR standards help you as a professional measure your professional progress and help your company measure the effectiveness of your HR team and leaders. Wong notes the HR standards are based on evidence from empirical research, learning reflected by practitioners, organizational data and stakeholder feedback. Since they reconcile cultural differences to set a baseline, the standards provide an implementable model for improvement.

The human governance standard, for instance, provides guidance for integrating the value sets of the company that cue employee behavior. “It's the overarching standard for how an organization needs to structure its human governance system,” Miles says. Using this standard helps you determine what good governance looks like. Putting metrics on items that were historically difficult to measure, such as values, allows you to make small changes and measure their impact over time.

Standards Support Strategic HR

Following the standards allows you to implement and track incremental changes across the organization, as you gain a more granular understanding of your organization’s human capital. Miles notes you can observe a tangible increase in engagement and retention or organizational outcomes like increased productivity and enhanced customer service, in the process proving return on investment for HR’s programs. You can see your own improvement and how you’re tracking against top competitors.

“The standard for workforce planning helps you think through the questions and issues that you need to consider to build up a profile of your workforce,” Wong says. He notes it doesn't tell you what to do, but what you need to know to begin moving forward. For example, the human capital reporting standard recommended by the SEC outlines a list of suggested KPIs laid out to accommodate small, medium and large companies. 

Following this standard helps set an industry baseline and demonstrates transparency with the public — in particular, investors and stakeholders. “The reporting standard is driving the need for companies to take a deeper dive into their HR processes and how they're adding value to the company,” Miles says. “That’s what the standards do.”

The end result is that HR today has the information and accompanying credibility to help a company plan for the brightest future possible, whereas not long ago it could be a struggle just to justify a seat at the table.

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