The Advisors' Blog

Seyfarth just released its Human Capital Disclosure Report — now in its third year. Based on a review of HCM disclosures of 200 companies in 2023 10-Ks, the report provides the following general trends — although it also recognized that the disclosures continued to vary widely from company to company:

We saw an increase in the number of HCM disclosures we reviewed specifically referencing culture up an average of 82.5% across industries.

Despite recent Supreme Court decisions raising issues about factoring race into college admissions decisions, we continued to see most HCM disclosures include reference to DEI efforts with 93.5% of the HCM disclosures we reviewed across industries including references to DEI principles. The number of companies including more detailed statistics related to diversity and year-over-year comparisons continued to increase with the number of companies that included demographics reporting increasing to 60.5% across industries (up from 44% in 2021).

While not at the same level of DEI references, we saw consistent numbers in the references to pay equity reviews in the HCM disclosures we reviewed—with 28.5% across all categories mentioning pay equity efforts—and most industries reflecting the same or increased references to pay equity reviews.

Perhaps not surprisingly, many of the HCM disclosures we reviewed focused on recruitment and retention efforts as a critical part of their HCM strategy. As part of that effort, employee benefits continue to play a front and center role. In addition to the compensation element, which is impacted by the pay equity analyses noted above, we saw many references to the importance of the company’s employee benefits package. These references often included mention of standard employee benefit programs, such as retirement plans and medical benefits, but many also referenced additional benefits offerings, such as mental health and well-being benefits, mindfulness tools, caregiver (caring for infants as well as disabled or elderly family members), and family planning and fertility benefits.

We also saw many HCM disclosures focus on employee engagement, noting engagement surveys, and other ways to assist employees with their professional development and general education. Many disclosures referenced remote and hybrid work options reflecting a continued desire for flexibility within the workforce. Companies also seemed focused on developing their talent pipeline, as another tool for retention and health of the business. We saw references to a variety of course offerings and programs, including traditional coursework from universities (some virtual) as well as mentorship and sponsorship programs. We also noted references to more discreet topics such as mindfulness, financial literacy, and English as a Second Language courses.

[T]he number of references to board level oversight of human capital issues in the HCM disclosures we reviewed (regardless of industry) continued to increase with an average of 45.5% reporting board oversight in this area, up from 25% in 2021 and 42% in 2022.

– Meredith Ervine