Monday, November 10, 2008

5 HR Metrics that are MUST HAVES in This Economy

We are definitely in unchartered territory. I believe that the way we have done business is and will change forever. The words accountability and productivity will be key going forward.

What does this mean for HR? I am not sure how all of this will all play out, but I do know HR will need to be accountable like we have never been before. How can HR assist with accountability and productivity? One way is to be a metrics champion to show accountability not just for HR but enterprise wide.
Below are 5 metrics to add to your current HR measures. If you do not measure anything now, I would start with these 5 metrics.

Here are 5 metric "must haves" for HR:
1) Revenue generating employees/# Full time employees-This is a critical metric in this economy. This metric speaks to efficiency especially around organizational design and process.

2) Employee engagement index-This measure is critical to track especially in down times as when times are good, the unengaged will be the first to leave. I know many factors affect engagement, HR should own this metric and provide coaching to line managers on how to improve this metric. What if the unengaged just happen to be your top performers?

3) % of employees with favorable performance rating-This number is critical to know during a downturn as we may have to make staffing decisions if a layoff needs to occur. We need to make sure we are keeping the best of the best. After the lowest performing employees are let go, management needs to understand the impact of eliminating top performers.

4) Management/staff ratio-As layoffs continue to occur, you may need to understand what the best management to staff ratio is for your company. (span of control and efficiency)

5) HR Service Delivery rating-How is HR performing with its customer? Is HR delivering the services that its customer values?

I know some of these measures HR may not have direct control over. But, HR does have influence on all these measures. Are there others that you are using? Please let me know by commenting or emailing me. I am interested to see which measures are being used during these crazy times.

You will notice that I did not list days to fill or cost per hire or any turnover measures. I believe we have discussed those so much already and they are currently measured by most companies. HR needs to move past these measures and think about those that are important to the business. I am not saying to quit measuring those things, I am saying add value metrics to them, so that HR can show value and efficiency and a true understanding of the business.
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