Monday, August 29, 2011

HR Metrics: Tracking vs. Insight

HR Metrics have been a passion of mine for several years now. It seems that HR Metrics have gained a lot of momentum in the last 2 years. I get many requests to speak on the subject and our company has increased projects and workshops in this area.

What bugs me the most, is the same issue I observed 5 years ago...

HR departments are not providing insight to leadership they provide tracking to leadership.

Yes, leadership wants to know something that impacts results or something they didn't already know. Here are some examples of things leadership is not (typically) waiting on pins and needles to see:

1) days to fill
2) # open reqs
3) # of training participants
4) turnover % for entire organization
5) hiring ratios from recruiting sources

But give leadership some insight, and you will be a rockstar:

1) turnover % of high performers with reasons for turn and an action plan to improve
2) HR forecast with new hires projected over next 12 months with staffing plans attached
3) ROI of recent training initiative with % increase in productivity and $ revenue increase
4) Average performance rating of new hires with baseline revenue/employee (to see growth over time)
5) Analyze new hire recruiting data and performance data to create a "success profile" for candidates increasing hiring success rate and decreasing cost per hire.

I was at a metrics conference last year and an attendee asked me the following question:

"Our team spends hours on our metrics, we have over 100 HR metrics we provide to our management. I send the document with a return receipt request to over 50 managers. I had 2 people actually open the document." "How can I increase the number of managers that use our data?"

I said, start over. After some more questions I found that ALL of the metrics were tracking metrics. If you were a CEO would you want to see how many transactions accounting processed last month, or so you care about receivables outstanding and what the impact is to the business? Same thing with HR. Yes, those tracking metrics are important to your department to make sure we are delivering quality service efficiently BUT what really matters is impact.

You have to start with strategy and work your way to metrics. By mapping your organizational strategy and then aligning HR to that strategy...the metrics that your leadership cares about become crystal clear.

Don't just start measuring for measuring's will wind up with way too many measures that don't tie to anything. Make your metrics matter by aligning them to your organizational strategy.

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