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HR Metrics Redefined: The Key Metrics to Measure in 2014

Posted by Mathew French

3 April 2014

Let’s go back in time for a second, to the year 2000. Your HR team is busy getting through a lot of paperwork, recruiting for new employees, preparing reports and managing employee information. You are reading through several reports. There’s data about staff turnover, the number of hours worked this week and absenteeism rates. The reports also look into how long employees stay with the organisation on average, diversity of employees and promotion rates amongst different roles.

Did these numbers tell you anything concrete? Did these numbers give you anything you could act on? Were the numbers able to help you determine how you can help your organisation grow through the right HR policies?

The answer is plain and simple – No.

HR metrics for HR Managers

These reports were fine in 2000, when the HR function was still believed to be a core function of the organisation, but it is not enough to prove HR’s worth in this day and age.

An HR InSights survey in 2014 uncovered that 85% of business leaders are unable to quantify HR’s contribution to the organisation. The lack of strategic contribution by HR has earned HR Managers the title of ‘Glorified Administrative Assistant’ over the last few years.

When HR is pushed to prove its worth, it is critical that HR Managers take a vested interest in making strategic contributions to the business. And the only way this can be accomplished is if HR Managers approach HR reporting and analytics in a more strategic way - using the right metrics and critical data to determine key actions the organisations must take to continue thriving in the competitive world.

But what are the key metrics you need to measure in 2014?

We’ve outlined them below:

1. Outcome metrics

Personnel Today highlighted that outcome metrics are just as important, if not more, as process metrics. They draw on the example of a succession-planning program – where 98% of 200 roles have a successor identified, but when you measure the outcome, the individuals identified in the planning process were appointed the successor only 8% of the time.

By measuring the outcomes instead of the process, HR Managers are in a better position to identify what’s not working and take the appropriate steps to rectify it. This will depend on the HR Manager taking a more outcome-focused approach, rather than a task-focused approach, across all their responsibilities.

2. Recruitment metrics

Recruitment is a key function to measure. In keeping with the outcome metrics mentioned above, it is crucial to measure the productivity and performance of internal hires vs. external hires, to determine the proportion of hires you need to source externally in future.

It’s also key to measure the different recruitment channels and processes, through the employees they have delivered, to identify the channels that have been most effective in delivering high-performance employees, and also the processes that have molded these employees in such a way.  

3. Employee productivity and engagement metrics

To ensure that the organisation runs successfully, you need to make sure your people are performing according to the roles they were hired to do. Productivity is a key component of measurement. Your employees may look busy, but if they are not doing the right things, they aren’t being productive.

Aside from conducting individual performance reviews, conduct an overall performance review of teams, and the overall organisation’s employees, to determine if they have contributed to the business’ growth / success.

Then, determine employee engagement during performance reviews to understand how invested your employees are in the organisation, and identify any factors such as relationships with managers to highlight any other contributing factors to engagement and productivity.

4. Workforce development metrics

One of the most crucial components of an organisation’s path to success is workforce development. It is therefore important to make sure you put in place special training programs or mentoring sessions to help your employees continue to learn. Of course, the metrics would then be the results of these training programs: the hours taken and costs incurred measured against the results generated from it.

It is also necessary to understand your employees’ satisfaction with the learning and growth opportunities provided by the organisation, and if their productivity is interrelated to these learning opportunities.

Aside from the four key categories above, HR Managers should already be measuring metrics related to compensation and benefits, as well as HR costs and results, as outlined in our previous blog on the key HR metrics in an organisation.

If you would like to read more about HR Metrics and how big data is changing HR reporting and discover the evolution of HR metrics; past, present and future, download our free White Paper below on HR Metrics. 

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Topics: HR Efficiencies, HR Data, HR Metrics, HR Managers

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