ISO 30414 Frequently Asked Questions
Contributors: Zahid Mubarik, Lee Webster
What is ISO 30414?
ISO 30414:2018 is a global International Organization for Standardization (ISO) technical publication which provides the adopter guidance on which measures of human capital are most relevant to organizational leaders, how some of them should be calculated, and how should they be reported to be relevant, comparable and impactful to decision makers. According to the scope of the document:
The measurement of human capital facilitates the ability of an organization to manage one of its most critical resources and risks, people. Research shows that organizations that do not manage their human capital may damage the ability and opportunity for the business to create long-term and sustainable value achieved through their people. (ISO 30414:2018).
Who Developed ISO 30414?
ISO 30414 was developed, reviewed and approved by experts in numerous field and organizations from across the globe. Besides professionals in human capital management, the group that created this standard included experts from academia, finance, government and other sectors that have an interest in knowing with greater precision and relevance how workforces are being managed. Over 50 countries are represented on the committee that approved this document for publication.
What is Human Capital Reporting?
Loosely speaking, Human Capital Reporting (HCR) is a practice where organizations regularly communicate essential metrics about the performance and management of the human talent to internal decision makers and external stakeholders. This practice mimics the disclosure of financial and operational metrics to investors and other interested parties in the marketplace.
Why do you need Human Capital Reporting?
Although the workforce is often referred to as the organization’s “greatest asset,” unlike other assets, very little information about the composition and impact of workers is revealed to owners of the enterprise. Not capturing and analyzing information about human assets, which often comprise 60-85% of the cost of an organization, obscures investors’ true knowledge of the performance of organization management. The scarcity of reporting about the physical and intangible value that new hires bring to organizations and current employees develop misstates or fails to recognize the wealth that is created by effectively hiring, managing and even discharging workers.
What is a Standard?
A Standard is a document that provides requirements, specifications and guidelines or characteristics that can be used consistently to ensure that materials, products, processes and services are fit for their purpose.
Who Develops Global Standards?
ISO is a legal association of members of national standards bodies of 162 countries, supported by a Central Secretariat based in Geneva, Switzerland. The foremost aim of international standardization is to facilitate the exchange of goods and services through the elimination of technical barriers to trade. ISO develops international standards for all industry sectors--except for electro technology, covered by IEC (International Electro technical Commission), and telecommunications, covered by International Technical Union.). ISO has 326 technical committees for standards development and they have developed over 23,012 International Standards for various profession so far. ISO standards make a positive contribution to the world we live in.
What are ISO Human Resources Standards?
In the past, ISO standards were developed only for the manufacturing sector. Currently more than 70% of the global economy is comprised of the service industry. The ISO human resources standards offer broad, coordinating guidance to human resources practitioners and harmonize disparate practices for the benefit of organizations and their employees. They are designed to boost local economies by removing of barriers to trade, enhancing international market access and improving business efficiency, flexibility, and providing a cost-effective means of complying with international and regional rules and conventions and enhancing employee satisfaction. HR standards specify the minimum effective approaches, measurements and metrics to perform essential Human Capital management practices.
The standardization processes extends to all fields of human resources management, including Human Capital Planning, Talent Sourcing, Recruitment, Selection, Retrenchment, Training and Development, Job Analysis, Job Design, Organizational Development, HRIS,Performance Appraisal, Total Rewards, Employee Relations, Legislative and Regulatory compliance, Change Management, Diversity and Inclusion Management, Expatriate Management, Human Resources Communications, Human Capital Readiness and Sustainability, Leadership Development, Human Resources Shared Services, Metrics, Analytics, Professional Certification, Wellness and Work/Life Balance Programs, Human Resources Aspects of Alliances, Joint Ventures, Mergers and Acquisitions, Human Resources Terminology and Nomenclatures.
How do Standards Facilitate Global Business and Economic Growth?
The global economy is transforming the definition of value from physical to intellectual capital. Business is considered as the most powerful indicator of economy. The World Trade Organization (WTO) requires its member countries to use international standards. Estimates by the Organization for Economic Cooperation and Development (OECD) show that standards and related conformity assessment have an impact on 80 % of the world’s trade in commodities. Here are two examples from leading economies. Source: https://www.iso.org/news/2012/08/Ref1639.html.
In Canada, the increase in the number of standards accounted for 17% of the labor productivity growth rate and about 9 % of the growth rate in economic output (real GDP) from 1981 to 2004.
In the UK, standards made an annual contribution of 2.5 billion pounds to the economy, and 13% of the growth in labor productivity was attributed to standards.
What are the Business Benefits of HR Standards?
HR standards offer broad, coordinating guidance to HR practitioners and harmonize disparate practices for the benefit of organizations and their employees.
Because of applying these standards: Labor markets can become true marketplaces, in which commonly understood forms of transactions include employee competencies, complete and timely information, and virtual/flexible working arrangements; creating talent exchanges analogous to stock exchange transactions.
Talent in developing countries will have increased access to job opportunities elsewhere due to interoperable Human Capital staffing practices.
Multinational companies can share talent and labor more quickly and with less risk of loss and fewer errors.
Standardized HR processes reduce paper documentation and promote telecommuting and distance learning, further reducing the carbon footprint created by business travel needs and redundant administrative Human Capital practices.
HR standards can increase employee satisfaction and labor peace as job-to-employee alignment is better achieved through consistent and effective management practices.
Consistency in HR practices reduces the cost of investigations and other regulatory responsibilities of government agencies and ministries charged with overseeing workplace practices.
The cost of managing employees declines as Human Capital management approaches align with the standards and economies of scale across sectors, in relocation, benefits, compensation and other HR functions.
Business leaders finally have a means to measure the value of the intangible assets including HR. The transparency of HR practices enhances the reputation of organizations, improves employee morale, lowers labor turnover, decreases accidents, enhances product quality and fosters greater consumer and investor confidence.
Employees’ expectations for treatment and opportunity within organizations are better understood by all parties and his or her competencies and other assets are more portable as he or she transfers among organizations. Whether skilled or unskilled, employees are incentivized to improve their capability and to trade them across borders to willing employers.
The cost of products and services goes down due to an increase in efficiency of acquisition, transfer, and maintenance of talent, benefiting consumers as well.
HR Management Systems from different organizations can better interact without encountering the data transfer barriers among diverse software applications.
Are there Risks using Human Capital Reporting Standards?
Some of the risks of using ISO 30414, specifically, and the act of reporting human capital information, generally, include:
Information about human capital management may reveal performance shortcomings that have been obscured so far
Adopters may not have access to correct or accurate data, may input the data into this process improperly, and therefore receive erroneous results from the use to this standard
Reviewers of Human Capital Reports may not adequately comprehend or misunderstand the meaning of the report and make faulty judgements based on this misunderstanding
Using ISO 30414 as justification, decisions makers may take an overly technical, quantitative view of managing the workforce
Where can I get Training to use ISO 30414?
Third-party companies are developing training on how to implement the standard, become certified against the standard, and even advance beyond the guidelines. This site will eventually list known providers of these services.
How do I know if I am using ISO 30414 correctly?
After deciding to adopt the standard, follow its recommendations fully. The first test is whether you can actually produce a set of measures in accordance with the standard. Next, share this product with knowledgeable experts in the technical area and seek their feedback about how informative this these measures are. If you can establish the production and analysis of these measures as a management practice for decision makers in your organization, then you have met the threshold of effective implementation of this guideline standard. If you seek external verification, you could compare your efforts with those of other adopters or seek a conformity assessment audit from a third party.
What is a Conformity Assessment?
According to the International Safety Equipment Association, “Conformity assessment is the name given to the processes that are used to demonstrate that a product, service or management system or body meets specified requirements. When applied to product, it involves testing to an established performance standard, as well as inspection, quality management, surveillance, accreditation and declaration of conformity.” (Accessed from https://safetyequipment.org/isea-standards/standards-faq/what-is-conformity-assessment/ on 21 January 2021)
In our case, there would be an audit of the practices and outcomes of adopters of ISO 30414 to determine the degree to which their implementation of the standard conforms to the document’s guidelines.The degree of conformity determines whether the organization can be certified as a conforming adopter by a reputable third-party.
How is Conformity Assessment being done with ISO 30414?
Adopters can approach third-party companies who are willing, for a fee, to audit their practices and assess their outcomes to determine if they are conforming to the guidelines of the standard. Typically these organizations will award successful adopters with a certification, or acknowledgement in writing, that their organization conforms to the standard. This site will eventually list known providers of these services.
What are the Benefits/Risks to a ISO 30414 certification?
Benefits:
Provides evidence to customers that you meet certain requirements that they value
Assure internal compliance with performance and quality expectations within the organization
Distinguishes your organization from its competitors in the marketplace
Risks:
Requires a third-party organization to enter your organization and observe your business practices
Normally done for a fee
No assurance that you will meet the requirements of the standard
May require changes in business practices, training, and documentation to comply with the standard
No guarantee that this effort will improve marketplace outcomes or business performance
How much will Adoption or Certification Cost?
These costs will vary depending on the size of your firm, the degree of effort it takes third party providers to audit the firm and other service factors. We recommend you contact several service providers to determine which service provides the best value.
Do I Have to Follow ISO 30414?
Following ISO standards is a voluntary act. Unless required by local public policy, no organization is required to follow ISO standards.
How Often is ISO 30414 Updated or Revised?
An ISO standard must be reviewed and potentially revised at least once every five years. However, member countries may decide, by consensus, to pursue a revision any time during that period. What usually prompts an ad hoc revision are significant changes in technology or management practices that would make the current standard obsolete.
Is ISO 30414 Applicable to Small or Mid-sized Organizations?
Yes. The standard is designed to be implemented by organizations of different sizes and structures.
Can I Participate in Revisions to ISO 30414?
If you join the body of national experts in your own country or are a member of an international organization that ISO has recognized as a participant in the development of this standard, then you may directly participate in any future revision. Indirectly, you may send comments about the standard at any time to your National Standards Body who will share them with the development committee. Please contact your NSB for more information. You may find information about them here: https://www.iso.org/get-involved.html.
Do Countries have Different Views on Human Capital Reporting Standards?
Yes, different countries and other stakeholders bring their own views to a discussion about HCR. That discussion, debate, and determination of the proper course of action, by consensus, is what ISO standards development is all about.
What is the Role of ISO Technical Committee 260 HR Standards?
With a view to promote consistency and standardize the Human Capital management practices in terms of responsibilities and performance expectations, ISO initiated standardization of HR and formed a Technical Committee (TC 260) in 2011. Initially the ISO TC 260 was comprised of 11 countries, including the US, France, Germany, Sweden, Switzerland, Austria, Italy, Norway, Netherlands, Pakistan and Portugal. Currently TC 260 has 31 countries with Participating “P” and 26 are Observers “O”. ISO TC 260 secretariat is held by American National Standards Institute ANSI. Details can be found at https://www.iso.org/committee/628737.html
What HR Standards have been Published by ISO TC 260 to Date?
ISO 10667-1:2011: Assessment service delivery — Procedures and methods to assess people in work and organizational settings — Part 1: Requirements for the client
ISO 10667-2:2011: Assessment service delivery — Procedures and methods to assess people in work and organizational settings — Part 2: Requirements for service providers
ISO 30400:2016: HRM Vocabulary
ISO 30401:2018: Knowledge management systems - Requirements
ISO 30405:2016: HRM Guidelines on Recruitment
ISO 30408:2016: HRM Guidelines on Human Governance
ISO 30409:2016: HRM Guidelines on Human Capital Planning
ISO 30414:2018: HRM: Guidelines for internal and external Human Capital Reporting
ISO/TR 30406:2017: Sustainable Employability Management for Organizations
ISO/TS 30407:2017: Cost-Per-Hire Metric
ISO/TS 30410:2018: Impact of Hire Metric
ISO/TS 30411:2018: Quality of Hire Metric
Note: Standards 9 through 12 listed above are supporting documents for HRM standardization.
Which Countries Have Hosted ISO HR Standards Meeting?
American National Standards Institute (10-11 Nov 2011 at Washington DC).
Standards Australia (23-25 Sep 2012 at Melbourne).
Netherlands National Standards (24-27 Sep 2013 at Rotterdam).
AFNOR France Standards (19-23 May 2014 at Paris).
National Standards Authority of Ireland (1-5 Dec 2014 at Dublin).
American National Standards Institute (9-13 Nov 2015 Galveston Texas).
DIN Germany Standards (2-4 May 2016 at Berlin).
SPRING Singapore Standards (29 Aug-2 Sep 2016 at Singapore).
British Standards Institute UK (8-11 May 2017 at London)
BSN Indonesian Standards (11-15 Sep 2017 at Bali)
AFNOR France Standards (14-17 May 2018 at Paris)
UNI-Ente Italiano de Normazione-Italy (18-22 Feb 2019 at Milan)
Standards Australia (2-6 Sep 2019 at Sydney)