💼 Job titles are among the most inconsistent attributes found in people datasets, according to workforce analytics firm Visier. Classifications tend to be extremely general and fall out of date quickly in a labor marketplace that’s transforming more rapidly than ever before. This lack of standardization creates barriers for cross-sector recognition of skills, and makes it difficult for employers, educators, and policymakers to align workforce development efforts. This fragmentation creates what researchers call a “Tower of Babel” situation where each company’s workforce data speaks a different language.

With properly designed taxonomies, we can give more accurate titles to positions, or develop a deeper understanding of what existing titles actually mean. We can determine with high certainty whether two jobs are truly comparable across companies or industries, and base classifications on systematic, data-driven analysis rather than arbitrary labels, comparing workforce composition in meaningful ways that reveal actual business strategy.

Why does this matter? Activity-based classification can distinguish between a macroeconomist specializing in forecasting, a microeconomist focused on client success, an applied econometrician working on pricing algorithms, and a business economist analyzing market structure. Each of these roles involves economics credentials, but the day-to-day activities, required skills, and business impact differ fundamentally. Job classification systems emphasize evaluating the duties, responsibilities, scope, and complexity of positions to determine appropriate categorization, not just the titles themselves.

Why does it matter to investors? Workforce intelligence firm Aura noted in a 2025 analysis that investors can use a company’s compensation strategies during due diligence to assess its leadership maturity and operation stability. If a company claims to be betting big on AI but offers below-market compensation for AI specialists, that can signal a red flag. If they’re hiring junior practitioners rather than experienced researchers, that reveals something about their actual ambitions versus their public statements.

Understanding a company’s pay positioning relative to the market provides crucial context — overpaying management or staff siphons resources that could drive growth, while underpaying risks higher turnover that can derail operations. With standardized taxonomies, investors can benchmark a company’s compensation for specific skill sets against competitors and identify retention risks before they materialize in earnings reports. Standardized workforce data also allows investors to understand how companies are actually competing, enabling true benchmarking of human capital efficiency across comparable roles, and giving investors confidence that there won’t be hidden labor cost surprises or talent crises post-investment.

The workforce is often a company’s largest investment and most important asset — investors deserve data they can actually use to evaluate that investment. Without them, we’re left with everyone reporting, no one understanding, and investors forced to make multi-mn USD decisions based on numbers that can’t be compared, verified, or properly analyzed.

So what now? Efforts toward standardization are already underway globally, but they remain frustratingly fragmented. ISO 30414, published in 2018, became the first international standard for human capital reporting, providing guidelines across 58 metrics in 11 core areas including diversity, leadership, organizational culture, and workforce availability. Developed by representatives from over 50 countries, this voluntary framework was designed to be applicable to all organization types and sizes, providing what many hoped would become a universal language for workforce reporting.

The EU has taken a more aggressive regulatory approach. The Corporate SustainabilityReporting Directive (CSRD), which came into effect in January 2023, mandates reporting on more than 30 workforce metrics through its ESRS S1 standards. The CSRD is prescriptive and mandatory, with fines reaching up to EUR 10 mn or 5% of annual revenue for non-compliance. The directive applies not only to large EU companies, but also to EU subsidiaries of non-EU companies that meet certain thresholds, creating reporting obligations that ripple across international borders.

The Sustainability Accounting Standards Board developed industry-specific standards for 77 industries, with human capital as one of five key sustainability dimensions. After merging into the International Sustainability Standards Board (ISSB) in 2022, these standards now form part of the IFRS Sustainability Disclosure Standards framework. The European Financial Reporting Advisory Group develops European Sustainability Reporting Standards and works to align with international frameworks, though coordination remains complex.

Here’s the problem: These efforts, while well-intentioned and sophisticated, pull in different directions. Each framework uses different methodologies, emphasizes different priorities, and serves different stakeholder needs. For multinational corporations, this creates a compliance nightmare. A company with operations in the US, EU subsidiaries, and global investors may need to report under SEC rules, CSRD requirements, and voluntary frameworks like ISO 30414 simultaneously.

International efforts to align these frameworks continue, with organizations like the ISSB working to create interoperability between standards. But progress is slow, and in the meantime, investors, employers, and employees trying to compare roles across borders face the same fundamental challenge: lots of information, minimal comparability, and limited utility for decision-making.

Tags: