Publicly traded companies are required by law to disclose only their global headcount, and that's all the information many of them provide. That keeps certain information a secret. These companies may be shrinking their U.S. headcount as they grow their overseas workforces. Six U.S. senators want to change that.
These senators -- all Democrats -- are co-sponsoring legislation, introduced Thursday, that would require publicly traded companies to disclose their numbers of employees by location, by state, and by country.
"It's hard to hold companies accountable for gaming the system and shipping jobs overseas when it's not even known where their employees are located," said Sen. Gary Peters (D-Mich.), in a statement. One of the key reasons this bill, called the Outsourcing Accountability Act, was introduced is because it is difficult to find information about the number of jobs that are moved offshore.
Peters introduced similar legislation in the U.S. House before he was elected to the Senate in 2013. The other bill sponsors are Sens. Debbie Stabenow (D-Mich.), Joe Donnelly (D-Ind.), Jack Reed (D-R.I.), Dianne Feinstein (D-Calif.) and Sherrod Brown (D-Ohio).
No more than 18 percent to 25 percent of publicly traded companies disclose their U.S. hiring, said Scott Liao, an associate professor of accounting at the University of Toronto, who wrote a paper in 2012 with Anne Beatty, a professor of accounting and management information systems at Ohio State University, that looked at corporate headcount disclosures.
The researchers found that companies that break out their U.S. headcount usually hire more U.S. workers. Companies that don't disclose their headcount may be moving jobs overseas or shrinking their U.S. workforces, and are worried about a public and employee backlash if that information is made public, Liao said, in an interview.
The nondisclosing companies "are hiding that information because they don't want the public, or the employees, to know their geographic deployment," he said.
If the law were changed to require geographic disclosures of employees headcounts, "it's possible" that more companies would hire domestically, Liao said, but he couldn't be certain of it.
Many U.S. tech companies don't report U.S. headcounts, but those that do may fit the model described by Beatty and Liao in their research paper.
Microsoft, for instance, discloses its U.S. headcount in its annual reports and increased its domestic workforce last year. In 2015, the company reported 118,000 full-time employees globally, 60,000 of them employed in the U.S., and 58,000 internationally. In 2016, Microsoft's overall workforce declined to 114,000, but its U.S. workforce increased to 63,000, and its international workforce declined to 51,000.
But another company, IBM, stopped providing its U.S. headcount in 2010. It's U.S. workforce had been declining as its overseas workforce increased. It now only provides a global headcount in its annual reports.
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