When the Securities and Exchange Commission updated Regulation S-K in 2020 to require public companies to disclose more information about human capital in annual filings, the rule was designed primarily with investors in mind.
New research from the University of Miami Patti and Allan Herbert Business School suggests that the regulation may also have reshaped how companies compete for talent.
In a study published in the Journal of Accounting Research, Daniele Macciocchi, associate professor of accounting at Miami Herbert, alongside co-authors Jung Ho Choi of Stanford University and Dan Li of Singapore Management University, examined how public companies changed their labor market communication strategies after the regulation took effect.
The researchers analyzed more than 5 million job postings from both public and private companies to understand whether new disclosure requirements around human capital influenced how firms approached diversity, equity, and inclusion, commonly known as DEI, in recruiting materials.
"What we wanted to understand was whether forcing firms to publicly discuss aspects of their workforce could create pressure that changes how they access the labor market," Macciocchi said.
Prior to the amendment, public companies were required to disclose relatively little information about their workforce beyond employee headcount and CEO-to-worker pay ratios. Regulation S-K expanded those requirements by asking firms to discuss broader aspects of human capital management in their annual 10-K filings.
The SEC intentionally left the guidance broad, allowing companies flexibility in deciding which aspects of human capital to discuss.
"What happened is that the large majority of firms decided to discuss diversity, equity, and inclusion issues," Macciocchi said. "We did not examine why they chose to do so. We examined what happened afterward."
The study found that public companies increased DEI-related messaging in job postings after the regulation compared with similarly sized private firms not subject to the disclosure requirement. The effect was especially pronounced among companies already facing pressure from ESG-focused investors and stakeholders to improve workforce diversity.
To conduct the research, the team used artificial intelligence and large language models to analyze millions of job postings at a scale that would have been nearly impossible manually.
"Without AI, this research would have taken forever," Macciocchi said. "The major improvement was automating the process and speeding up the process, rather than improving the quality itself."
Using AI tools allowed the researchers to move beyond simple keyword analysis and evaluate the context and credibility of DEI messaging in job postings.
Older text-analysis methods relied heavily on predefined vocabularies and keyword matching. Large language models, Macciocchi explained, allowed the research team to evaluate whether companies appeared genuinely committed to diversity efforts or were simply repeating boilerplate language.
"One of the cool things we do in the paper is try to understand whether firms just use typical boilerplate language versus whether they really try hard to explain why they care about diversity," Macciocchi said. "When the message looks like a 'tick-the-box' type of thing, there is no improvement in diversity."
The findings also revealed that changing workforce diversity itself proved far more difficult than changing messaging.
Companies attempting to improve workforce diversity interviewed more candidates, took longer to fill positions, extended more offers, and experienced higher rejection rates from prospective employees.
"Structural changes take a long time," Macciocchi said. "Even after several years, the changes are not as large as people might expect."
The study highlights the growing intersection between securities regulation, labor markets, and artificial intelligence, areas Macciocchi believes will continue shaping business research in the coming years.
"This research points to a broader shift in how firms communicate with stakeholders," Macciocchi said. "Not only shareholders, but employees, prospective employees, and the labor market more generally."
For Miami Herbert students, Macciocchi said the research also demonstrates how AI and data-driven analysis are transforming modern business research and education.
"It aligns with how Miami Herbert has been emphasizing AI and data-driven business education in recent years," he said.
