Key Issues in HR Metrics

Key Issues.BLOGHuman resources measurements (or metrics) are a trending topic, and as the technology improves, so will the conversation. Doing research on metrics can be overwhelming when you see the volume of information available. It can leave your head spinning and lead you directly into inaction, or worse, the wrong actions. It’s time to slow down, take a closer look, and start asking, “Are we measuring the right things?”

The first thing to explore is your organization’s strategic or long-term plan. Do you know what the plan is and what HR’s role is in meeting that plan? The data HR gathers should be able to show quantitatively how HR is contributing to the business. For example, if your organization is anticipating significant growth, can you quantify your recruiting practices and efficiencies, or do you know your most successful sourcing tools? If the organization is anticipating financial cutbacks, can you quantify the cost of the current human capital, turnover, cost to hire or replace? These are just a few questions to ask.

You also want to take a look at the tools you use to gather data. Can you get consistent numbers? Are the data understandable and useful to all who will be looking at them? According to the 2015 Price Waterhouse Cooper “Trends in People Analytics” report, only 6 percent of participants said they are very satisfied with the quality of their people data, and 29 percent of respondents pointed to poor data quality being a barrier to accurate reports or analytics. The report makes it clear that a key part of building and maintaining a data governance program is to make sure there is a consistent understanding of definitions, formulas, etc. If you fall in that 6 percent, you might want to take a look at your current systems to assess if they are giving you what you need.

Next you want to look at what you are measuring now and assess whether those are the most helpful metrics. One example is turnover. If you are currently tracking turnover rates, is that the most efficient? Maybe you want to measure the high-performer turnover rate instead. If the majority of your turnover consists of high performers, that is costing you more than if the majority of employee exits are low performers. You will want to take a look at why the high performers are leaving and adjust your retention efforts there. It is important to take a look at everything you are tracking and decide if it should be changed or if it should be eliminated.

Executives are increasingly looking for evidence-based insight on all HR issues. HR has to be able to show that it is an active contributor to the organization now and for the future. Understanding the company’s strategic vision and how HR aligns with that vision is imperative. The tools you use and the data you gather will impact HR’s ability to provide that information.