Human Capital Competitive Index for ESG S-Metrics
Unlocking Sustainable Growth through Human Capital Analytics
What is Human Capital Competitive Index (HCCI)?
- HCCI is a survey-based measurement.
- It informs organizations where they stand on specific metrics compared to peer organizations or relevant industries.
- E.g What is your company’s turnover and median turnover? Additionally, what are your objectives for the year regarding employee retention?
What is Context for HCCI?
The Human Capital Compliance Index (HCCI) is a strategic framework that aligns with the Securities and Exchange Commission of Pakistan’s (SECP) ESG Guidelines (2023), emphasizing the social (“S”) aspect of ESG metrics. It provides a structured approach for organizations—both listed and non-listed—to measure, evaluate, and enhance their human resource practices in accordance with globally recognized sustainability standards. The SECP guidelines outline 14 key HR metrics, including workforce turnover, diversity and inclusion, compensation equity, employee health and safety, and succession planning, all of which are fundamental to fostering a resilient and ethical corporate culture. By leveraging HCCI, companies can set measurable objectives, conduct competitor benchmarking, and demonstrate a commitment to responsible business practices, thereby fostering stakeholder trust and enhancing longterm sustainability. While HCCI is particularly relevant for publicly listed companies, non-listed entities are also encouraged to adopt these best practices to improve their workforce management and overall ESG performance, ensuring they remain competitive in an increasingly responsible and transparent business environment.
What is purpose of HCCI?
Assess Organizational Performance
Evaluate current social practices against SECP’s defined metrics to identify areas of strength and improvement.
Drive Strategic Decisions
Provide data-driven insights for improving social impact, workforce engagement, and corporate responsibility.
Enhance Market Competitiveness
Position the organization as a socially responsible entity, attracting investors, customers, and top talent.
Ensure Regulatory Compliance
Align with SECP’s ESG guidelines to mitigate risks and maintain compliance with evolving regulations.
What are benefits of HCCI?
Enhanced Organizational Growth
- Adoption of these metrics positions organizations as socially responsible leaders, attracting sustainable investments and expanding market opportunities.
- Companies that demonstrate their commitment to ESG principles are more likely to secure funding from ESG-focused investors and financial institutions, fostering long-term financial stability and growth.
Employee Welfare and Retention
- Improved workplace policies and equitable practices boost employee satisfaction, engagement, and loyalty.
- A satisfied workforce contributes to lower turnover rates, reducing recruitment costs and ensuring continuity in operations. Enhanced employee morale also leads to higher productivity and innovation.
Competitive Advantage
- Compliance with ESG standards differentiates organizations from competitors, making them more appealing to investors and customers.
Companies that integrate these metrics into their operations are better positioned to respond to market demands for sustainability, thereby gaining a significant edge in attracting environmentally and socially conscious consumers.
Risk Mitigation
Compliance with ESG standards differentiates organizations from competitors, making them more appealing to investors and customers.
Companies that integrate these metrics into their operations are better positioned to respond to market demands for sustainability, thereby gaining a significant edge in attracting environmentally and socially conscious consumers.
Long-Term Sustainability
Integration of these metrics ensures alignment with global standards, fostering resilience and adaptability in a dynamic business environment.
By adopting these practices, companies can anticipate and adapt to regulatory changes, technological advancements, and societal expectations, ensuring their relevance and success in the long term.
Improved Stakeholder Relationships
Transparent ESG reporting builds trust and credibility with stakeholders, including employees, customers, investors, and regulatory bodies.
Demonstrating a commitment to ethical practices and social responsibility enhances the company’s image, strengthening stakeholder loyalty and advocacy
What is Strategic Importance of HCCI?
HCCI is not just the regulatory perspective but also numbers are the universal language of business. Organizational leaders prefer to take decisions on evidence-based data. Shareholders, board members, CEOs, CFOs all measure results. They are keen to see verifiable connections between human capital investments and leading indicators of organizational sustainability. Human capital analytics and benchmarks have thus become a differentiator between top class and traditional HR department. In the dynamic and competitive business landscape, adherence to the Securities and Exchange Commission of Pakistan (SECP) ESG Guidelines is not merely a regulatory requirement but a strategic imperative. By integrating these metrics into their operational and reporting frameworks, organizations can unlock a multitude of benefits, including enhanced transparency, improved employee satisfaction, and increased investor confidence. This proposal provides a detailed roadmap for organizations to implement these metrics effectively, achieve industry benchmarks, and capitalize on the competitive advantages of ESG compliance
What Metrics are included in HCCI?
- Report the ratio of median male compensation to median female compensation. This transparency promotes pay equity and enhances organizational reputation.
- Measure the CEO’s total compensation against the median Full-Time Equivalent (FTE) compensation.
- Full-Time Employees
- Part-Time
- EmployeesContractors/Consultants
- Percentage of total headcount held by men and women.
- Percentage of entry- and mid-level positions held by men and women.
- Percentage of senior- and executive-level positions held by men and women.
- Percentage of total enterprise headcount held by part-time employees.
- Percentage of total enterprise headcount held by contractors/consultants.
- Grievance mechanism is in place to address incidents of harassment and violence.
- Track the percentage of women and men promoted annually.
- Adherence to global health and safety policies.
- Injury rates, safety incidents, and lost production hours.
- The percentage of employees covered by health and safety insurance
Policies prohibiting child and forced labor.
Policies to suppliers and vendors to ensure ethical sourcing
- Document CSR activities, including total time and financial resources allocated.
- The number of training sessions held (e.g., skill upgradation, soft skills, health and safety)
- The number of employees trained and the gender breakdown
Complaints related to working conditions and their resolution.
The frequency of injury events and safety incidents.
- The adoption of responsible marketing communication policies with a focus on gender sensitivity.
Evaluate and report financial productivity per employee, ensuring optimal resource allocation
Measure returns generated from human capital investments to assess workforce efficiency.
Analyze total workforce expenditure per employee to ensure cost-effective management
Track HR expenses against overall operating costs for budgeting and efficiency insights
Measure workforce contributions to overall business profitability and productivity.
Report the total expenditure on employee compensation, benefits, and related costs
Evaluate costs associated with contractors and consultants for financial efficiency.
Analyze all employment-related expenses, ensuring compliance with financial planning
Compare average salaries and remuneration packages for competitive benchmarking.
Track the cost incurred per new hire to optimize recruitment spending.
Report expenses associated with recruitment activities, including advertising and onboarding.
Assess financial impact due to employee turnover, ensuring workforce stability.
Measure recruitment costs as a percentage of total human capital expenses
Report the percentage of job vacancies remaining unfilled to assess hiring efficiency.
Calculate potential revenue loss due to unfilled roles, highlighting operational inefficiencies.
Evaluate financial losses caused by voluntary employee departures
Compare training expenditures to total workforce costs for development investments
Analyze compensation spending in relation to overall human capital costs
Track salaries as a proportion of total compensation packages
Measure benefits expenditure relative to total compensation
Measure age distribution across employee segments
Track the percentage of employees with disabilities, ensuring inclusivity
Evaluate additional diversity metrics, including ethnicity and socio-economic factors
Assess diversity representation in leadership roles.
Analyze employee distribution across various age brackets
Measure workforce tenure distribution to assess retention and experience levels
Evaluate the availability of skilled applicants per vacancy.
Assess new hires based on performance and retention rates.
Track recruitment efficiency by measuring vacancy duration.
Measure hiring speed for key business roles
Evaluate succession readiness and skill gaps.
Track internal mobility and promotions
Report succession planning effectiveness for key roles
Measure strategic role allocation
Assess business continuity risks due to leadership gaps
Measure employee career progression within the organization
Assess readiness of employees to step into leadership roles
Report overall employee attrition percentage
Track resignations to understand employee retention
Measure turnover among key business roles.
Analyze employee exit motivations for improvement
The adoption of responsible marketing communication policies with a focus on gender sensitivity.
Report terminations and layoffs
Measure turnover among female employees
Assess retention of women in leadership roles.
Track success rates of offered positions
Measure vacancies as a proportion of total positions
Evaluate employee retention post-hiring
Track productivity and performance of new employees.
Measure HR staffing efficiency in recruitment
Measure employee engagement in training programs
Measure employee engagement in training programs
Break down training participation by skill and department
Evaluate employee skill proficiency levels
Measure training team adequacy
Report workforce development through internal programs
Track success of internal leadership development
Assess succession planning readiness
Measure employee career progression opportunities
Track structured career development paths
Report promotions as a percentage of workforce
Measure lateral career movements
Measure employee confidence in leadership, ensuring effective management and decision-making.
Evaluate the number of direct reports per manager to optimize organizational structure
Track the percentage of leadership positions filled by trained internal candidates
Measure employee morale and commitment to the organization
Assess the organization’s ability to retain employees over time
Track reported workplace concerns to ensure fair resolution processes.
Measure effectiveness of disciplinary procedures and compliance enforcement
Ensure organizational adherence to ethical and regulatory standards
Track unresolved workplace disputes requiring third-party intervention
Assess compliance issues identified during external audits and implemented corrective actions
Measure the percentage of grievances successfully resolved within a given timeframe
Track the efficiency of grievance resolution processes
Report lost work hours due to workplace injuries, ensuring safety compliance
Measure workplace safety by tracking the number of reported incidents.
Assess fatal workplace accidents and implement safety improvements
Measure workforce engagement in professional development programs
Track workplace incidents that could have resulted in injury or damage to prevent future risks
Report total workforce size for resource planning and analysis
Measure workforce strength in terms of full-time workload equivalents
Track the percentage of independent contractors in the workforce
Measure the reliance on temporary staff for business operations
Track employee absenteeism rates and identify trends affecting productivity.
Potenial Industries
Banking and finance
Energy
Healthcare
Manufacturing non-durable
Media and Entertainment
Pharmaceuticals
Public Administration Office
Retail
Technology
Telecommunication
Construction
Education
Manufacturing durable
Oil and Gas
Renewable Energy
Textile
Transportation and Logistics
Fee for the Core 14 Metrics: Rs 250,000
Fee for up to 50 Metrics: Rs 500,000
Fee for all 90 Metrics: Rs 700,000
Takeaways
- Training on SECP 14 “S” ESG Metrics
- HCCI Report on industry benchmarks
- Guidance on annual goal setting
- Guidance on how to write ESG report
Disclaimer
The program is an independent initiative by HR Metrics and is not affiliated with any regulatory body. It serves as a facilitation tool to help companies implement voluntary S-ESG (Social-Environmental-Governance) Metrics. However, the program is not limited to regulatory compliance; it also includes advanced competitive metrics that go beyond basic compliance, providing companies with deeper insights and strategic advantages.