Hacking HR Features Session on the Alpha of People

Speakers 

• Solange Charas,  Professor, Human Capital Management, Columbia University, and Founder of HCMoneyball, a New York City-based human capital analytics advisory firm.
• Bart Houlahan, Partner, Irrational Capital, West Conshohocken, PA, an analytics firm whose Human Capital Factor is linked to future value creation and enhance share price performance, and a Co-Founder of B-Lab, a certification firm for purpose-focused companies.
• Martin Whittaker, CEO, JUST Capital, New York, which measures and ranks companies on the issues Americans care about. The rankings are used to select companies for the Goldman Sachs JUST Capital Large Cap ETF.

Highlights

Bart Houlahan 

• Houlahan outlines the work conducted at Irrational Capital and the connection between treating people well and outperformance in the equity markets.
• He explains the use of proprietary data and public data, coupled with social science research by Professor Dan Ariely, Professor of Psychology and Behavioral Economics at Duke University, to identify the factors that contribute to value creation through people.
• The stocks identified by the Human Capital Factor framework have consistently outperformed the market benchmarks by 3-6% annually in ETFs (exchange-traded funds) management by Harbor Capital. 
• The Human Capital Factor index is driven exclusively by employee sentiment data, not financials.
• The results have been independently validated by J.P. Morgan’s quantitative analytics group.
• He  emphasizes the importance of stakeholder commitment and the role of CEOs and boards in human capital management.

Solange Charas 

• She believes the shift toward viewing people as a source of value creation gained traction in 2020 under the prior Trump administration when the Securities & Exchange Commission reclassified human capital as an investment in an intangible asset.
• HR can no longer operate as a cost center, she says, stressing the urgency of taking steps to prove the direct link between investment in people and sustainable bottom-line performance.
• She says she cannot emphasize enough the importance of integrating human capital programs with business strategy and the need for HR to use financial metrics and data-driven approaches.
• HR has a big opportunity to help organizations serve all stakeholders, including shareholders, customers, investors, strategic business partners, employees, and the community, and underlines the importance of designing work environments to enhance retention, productivity, and innovation.

Martin Whittaker 

• He shares the surveys and research conducted by JUST Capital and its focus on inspiring businesses to tackle major societal challenges in a way that produces superior shareholder returns.
• The JUST 100 index comprised of companies rated high in employee, customer, and environmental issues has consistently outperformed its Russell Index benchmark.
• The leadership of CEOs and boards in human capital management is a critical opportunity for value creation.
• Understanding the interrelationships of stakeholders and the interconnectedness of various factors in business are critical success factors overlooked by many.
• Most Americans of either party, when asked about their priorities, put concerns for workers well ahead of the needs of consumers or the environment. Making contributions to charities is at the bottom of the run, in terms of what people expect of companies. 

Bruce Bolger 

• He emphasizes the enormous potential for the human resources profession as organizations seek to profit from growing body of proof that organizations with high levels of stakeholder alignment and engagement have a better chance of survival and success.
• One challenge is that human capital management is barely taught in schools and that CEOs generally are not measured on people metrics.
• The lack of respect for or understanding of human capital analytics leads to dubious decision-making, such as return-to-work rules that research suggests generally results in the loss of the best talent.
• While agreeing that HR needs a new set of competencies in the new world of value creation through people, the profession should double-down on the need to foster one-on-one, safe relationships with all stakeholders to not only detect challenges but also opportunities.

Enterprise Engagement Alliance Services
 
Celebrating our 15^th year, the Enterprise Engagement Alliance helps organizations enhance performance through:
 
1. Information and marketing opportunities on stakeholder management and total rewards:

• ESM Weekly on stakeholder management since 2009. Click here to subscribe; click here for media kit.
• RRN  Weekly on total rewards since 1996. Click here to subscribe; click here for media kit.
• EEA YouTube channel on enterprise engagement, human capital, and total rewards since 2020