Monday, February 8, 2010

What is the #1 HR Metric to Report to Your CEO?

I ran across a very interesting blog from Halogen Software regarding Hot Button HR issues for 2010. I liked the 10 questions they posed to the HR subject matter experts in the HR Raging Debates Forum. What I found the most interesting is that Halogen conducted a poll with HR professionals and one of the questions asked was, regarding the #1 metric HR reported to their CEOs. Here are the responses according to Halogen:

1) ROI on talent management - 35%

2) Employee engagement - 24%

3) Retention - 17%

4) There isn’t one - 24%

I found this list pretty incredible, although I do not know the composition of the sample. So, let's just assume these are HR professionals that report or report close to the CEO. Here are my thoughts on that list:

1) ROI on talent management-what does that mean? what is the exact metric? I am assuming the metric is trying to prove productivity and efficiency of the workforce as a result on talent management activities. Why not just report productivity numbers, I bet the CEO gets that?

2) Employee engagement-I am a BIG fan of this metric but not on its own. I believe engagement needs context, it needs to be in context of trends, i.e. employee engagement has increased 10% this quarter and customer engagement has increased by 5%. Engagement is a great metric it just needs "cause and effect" data to illustrate the point that it is not just a soft measure but one that really does impact the bottom line.

3) Retention-REALLY? Not too many people are having that problem. I know this needs to be tracked, but right now it is not the #1 metric on your CEO's mind....I promise.

4) No metrics-Now this really hurts my feelings. Has no one been paying attention to HR becoming a strategic business partner? Not having metrics is a good way of making sure HR's value is never understood. Start with an easy metric let's say revenue per employee or profit per employee. Try average performance rating per employee or % of employees scoring "exceeds expectations." Track those over time and see what trends and information you uncover.

I know there are many others that you are using, tell us your #1 metric for your CEO and any others you are using that assist with HR's value proposition.
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