ISO/PRF TS 30427

Human resource management -- Cost metrics cluster

Management des ressources humaines -- Indicateurs de mesure des coûts

Standards Content (sample)

TECHNICAL ISO/TS
SPECIFICATION 30427
First edition
Human resource management — Cost
metrics cluster
Management des ressources humaines — Indicateurs de mesure
des coûts
PROOF/ÉPREUVE
Reference number
ISO/TS 30427:2021(E)
ISO 2021
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ISO/TS 30427:2021(E)
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© ISO 2021

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ISO/TS 30427:2021(E)
Contents Page

Foreword ........................................................................................................................................................................................................................................iv

Introduction ..................................................................................................................................................................................................................................v

1 Scope ................................................................................................................................................................................................................................. 1

2 Normative references ...................................................................................................................................................................................... 1

3 Terms and definitions ..................................................................................................................................................................................... 1

4 Total workforce costs ....................................................................................................................................................................................... 1

4.1 General ........................................................................................................................................................................................................... 1

4.2 Purpose .......................................................................................................................................................................................................... 2

4.3 Formula ......................................................................................................................................................................................................... 2

4.4 How to use .................................................................................................................................................................................................. 2

4.5 Intended users ......................................................................................................................................................................................... 2

4.6 Contextual factors ................................................................................................................................................................................. 3

4.7 Predictive factors .................................................................................................................................................................................. 3

5 Total external workforce costs............................................................................................................................................................... 4

5.1 General ........................................................................................................................................................................................................... 4

5.2 Purpose .......................................................................................................................................................................................................... 4

5.3 Formula ......................................................................................................................................................................................................... 4

5.4 How to use .................................................................................................................................................................................................. 5

5.5 Intended users ......................................................................................................................................................................................... 5

5.6 Contextual factors ................................................................................................................................................................................. 5

5.7 Predictive factors .................................................................................................................................................................................. 6

6 Ratio of basic salary and remuneration ....................................................................................................................................... 6

6.1 General ........................................................................................................................................................................................................... 6

6.2 Purpose .......................................................................................................................................................................................................... 6

6.3 Formula ......................................................................................................................................................................................................... 6

6.4 How to use .................................................................................................................................................................................................. 7

6.4.1 General...................................................................................................................................................................................... 7

6.4.2 Alternative metric for consideration .............................................................................................................. 7

6.4.3 Alternate formula ............................................................................................................................................................ 7

6.5 Contextual factors ................................................................................................................................................................................. 7

6.6 Predictive factors .................................................................................................................................................................................. 8

7 Total costs of employment .......................................................................................................................................................................... 8

7.1 General ........................................................................................................................................................................................................... 8

7.2 Purpose .......................................................................................................................................................................................................... 8

7.3 Formula ......................................................................................................................................................................................................... 8

7.4 How to use .................................................................................................................................................................................................. 8

7.5 Contextual factors ................................................................................................................................................................................. 8

7.6 Predictive factors .................................................................................................................................................................................. 9

Bibliography .............................................................................................................................................................................................................................10

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ISO/TS 30427:2021(E)
Foreword

ISO (the International Organization for Standardization) is a worldwide federation of national standards

bodies (ISO member bodies). The work of preparing International Standards is normally carried out

through ISO technical committees. Each member body interested in a subject for which a technical

committee has been established has the right to be represented on that committee. International

organizations, governmental and non-governmental, in liaison with ISO, also take part in the work.

ISO collaborates closely with the International Electrotechnical Commission (IEC) on all matters of

electrotechnical standardization.

The procedures used to develop this document and those intended for its further maintenance are

described in the ISO/IEC Directives, Part 1. In particular, the different approval criteria needed for the

different types of ISO documents should be noted. This document was drafted in accordance with the

editorial rules of the ISO/IEC Directives, Part 2 (see www .iso .org/ directives).

Attention is drawn to the possibility that some of the elements of this document may be the subject of

patent rights. ISO shall not be held responsible for identifying any or all such patent rights. Details of

any patent rights identified during the development of the document will be in the Introduction and/or

on the ISO list of patent declarations received (see www .iso .org/ patents).

Any trade name used in this document is information given for the convenience of users and does not

constitute an endorsement.

For an explanation of the voluntary nature of standards, the meaning of ISO specific terms and

expressions related to conformity assessment, as well as information about ISO's adherence to the

World Trade Organization (WTO) principles in the Technical Barriers to Trade (TBT), see www .iso .org/

iso/ foreword .html.

This document was prepared by Technical Committee ISO/TC 260, Human resource management.

Any feedback or questions on this document should be directed to the user’s national standards body. A

complete listing of these bodies can be found at www .iso .org/ members .html.
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ISO/TS 30427:2021(E)
Introduction

ISO 30414 highlights guidelines on the following core human capital reporting areas or “clusters”:

— compliance and ethics;
— costs;
— diversity;
— leadership;
— organizational culture;
— organizational health, safety and well-being;
— productivity;
— recruitment, mobility and turnover;
— skills and capabilities;
— succession planning;
— workforce availability.

This document deals specifically with the cluster of metrics in the costs cluster. ISO 30414:2018, 4.7.3,

describes workforce costs and the importance of measuring workforce costs.
The costs cluster includes the following metrics:
— total workforce costs;
— external workforce costs;
— ratio of the basic salary and remuneration;
— total costs of employment;
— cost per hire;
— recruitment costs;
— turnover costs.
This document includes the following metrics:
— total workforce costs;
— external workforce costs;
— ratio of the basic salary and remuneration;
— total costs of employment.
ISO/TS 30407 details cost per hire metric.
ISO/TS 30421 details recruitment cost and turnover cost metrics.

NOTE Additional metrics and explanation are included in ISO 30405, ISO/TS 30410 and ISO/TS 30411.

1) Under preparation. Stage at the time of publication: ISO/CD TS 30421.
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ISO/TS 30427:2021(E)

Where the outsourced workforce is a significant and material element of the organization’s workforce

costs, it can be preferable to report outsourced workforce costs separately.
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TECHNICAL SPECIFICATION ISO/TS 30427:2021(E)
Human resource management — Cost metrics cluster
1 Scope

This document describes the elements of organizational workforce costs. This document provides the

formula for comparable measures for internal and external reporting.

This document also highlights issues for consideration when interpreting the cost data, especially when

deciding on the appropriate intervention internally and when reporting these to external stakeholders

(e.g. regulators, investors)
2 Normative references
There are no normative references in this document.
3 Terms and definitions
For the purposes of this document, the following terms and definitions apply.

ISO and IEC maintain terminological databases for use in standardization at the following addresses:

— ISO Online browsing platform: available at https:// www .iso .org/ obp
— IEC Electropedia: available at http:// www .electropedia .org/
3.1
full-time equivalent
FTE

number of full-time employees needed to complete the equivalent of the total hours worked by all

employees in a defined period
4 Total workforce costs
4.1 General

Workforce costs are one of the most critical factors for organizations, with a direct influence on

the earnings or value preposition of an organization. Investors are interested to see the amount an

organization invests in the workforce, and the return on that investment in terms of profitability,

and also increasingly on non-financial and more intangible measures. The extent of reporting on

total external workforce costs should be determined by the organization itself. However, there are

indications of the future importance of this metric, for example in terms of digitalization. The objective

of this human capital reporting area is to quantify the expenditure of an organization on people. To

report the human capital costs means that human capital can be an investment and that workforce

costs, which are a major influencing factor in human resource management, can be easily calculated.

Total workforce costs, also known as total labour costs, are similar to total cost of workforce and

include total costs of employment, or total employee costs, and external workforce costs. Total costs

of employment include all employee-related costs for the organization for a given time period. Total

external workforce costs are defined as plus contingent (contract and temporary) workers directly

controlled or managed by the organization. Total workforce costs cover salaries and compensation

costs, benefits costs and other employee compensation or remuneration costs. Table 1 gives an example

of the breakdown of total workforce costs.
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ISO/TS 30427:2021(E)
Table 1 — Reporting on total workforce costs
Percentage
Workforce costs Prior year USD Current year USD
change
Employee salary 464 000 000 510 000 000 9,9
Bonus and incentive 70 000 000 75 000 000 7,1
Benefits 150 000 000 170 000 000 13,3
Other compensation 1000 000 1000 000 0,0
Total costs of employment 685 000 000 756 000 000 10,4
External workforce costs 45 000 000 54 000 000 20
Total workforce costs 1 415 000 000 1 566 000 000 10,7

NOTE See Clause 5 for external workforce costs formula and Clause 7 for total costs of employment formula.

4.2 Purpose

Internal and external human capital reporting is key to demonstrating how the organization values its

people and the sustainable value proposition it offers to various stakeholders.

This metric is a key indicator of the financial value given by an organization to managing, maintaining

and developing its workforce. Total workforce costs include total costs of employees, i.e. total costs of

employment and total costs related to external workforce costs.

This is a comprehensive metric which includes total compensation and other workforce costs, which

sum to the total workforce costs.

The relative workforce makeup, such as global workforce distribution, education, experience, job

level, pay practices and more, has a profound effect on total workforce costs. Across industries, total

workforce costs or total labour costs can vary dramatically; however, within a given industry, total

workforce costs can be a highly valuable historical and predictive indicator of performance and

therefore an excellent metric for industry-level benchmarking.
4.3 Formula

Total workforce costs = total employee compensation costs + total employee benefits costs + external

workforce costs
Tot
...