In their 2013 study on HR analytics effectiveness, HR InSights surveyed over 250 HR professionals on the use of analytics within the HR function to determine its impact on the rest of the organisation. The results of this survey were far from satisfactory, from a HR Manager’s perspective.
85% of the leaders surveyed were unable to quantify HR’s contribution to the business. Perhaps this was because HR never benchmarked or measured their own’ function’s performance in any way. This lack of measurement was also present in other aspects of the organisation, since it is found that one third of the respondents did not measure business outcomes from people-performance initiatives.
An Economic Intelligence Study of 418 global executives commissioned by KPMG echoed the above results, showing 85% of those surveyed finding that their HR team doesn’t excel at providing insightful and predictive analytics. They continue to highlight that HR Managers understand the value of good analytics in reporting, and yet, despite this, they continue to produce reports that provide nothing more that basic operational or transactional measurements – or useless facts, falling short of providing valuable or actionable insights that could genuinely make a contribution to the business’ success.
So how can HR contribute to your organisation’s success?
By measuring the right things, of course.
For HR Managers to break out of this mould, there needs to be a focus on delivering real insight that will make a strategic impact on the business. KPMG believes that “by creating a clear ‘line of sight’ between HR activity and your bottom-line profitability, HR analytics can provide a tangible link between your people strategy and your organisation’s performance”.
Drawn from the works of Chartered Institute of Personnel and Development (CIPD) UK and HR thought leader Dr. John Sullivan, we’ve compiled a list of key metrics you need to measure to draw real insight that can help the business move forward in its strategic direction:
If you add these key metrics that you need in your HR reports, those can give you a deeper insight into productivity levels within the organisation and the factors that contribute to such productivity. By identifying the factors that contribute to high productivity levels, you can adjust your recruitment or employee engagement strategies to incorporate them even further, to maximise productivity. Only then can HR prove itself to be an integral component of an organisation’s success.
If you would like to understand the evolution of HR Metrics, past, present and future, download the free White Paper below. If you're ready to explore how HR Reporting software can transform your business, request a discovery session, where you'll get a customised demonstration from the comfort of your own desk.