06.27.2016

Know What Metrics You Should Apply to HR

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Do you know how much your employees are costing you, relative to what they’re producing for you? Do you know what your turnover rates are, compared to other companies in your industry? Do you know who your most effective manager is? What I mean is, do you have data on any of this stuff? Some organizations really take to heart Peter Drucker’s admonition: “You can’t measure what you can’t manage.”  But for some reason, many organizations never think to apply metrics to HR. Or maybe they just don’t know what metrics you should apply to HR.

Based on our diversity metrics, everyone in the company is white and 25 years old....problem?
Based on our diversity research, everyone in the company is white and 25 years old. Hmmmm….

<h4>What are HR metrics?</h4>
How about measuring diversity at the leadership level? Or worker’s comp claims and where they come from? What if you kept track of where most of your turnover, promotions, sick days or disciplinary actions come from? Keeping numbers could show you things that would surprise you, like when the majority of your “problem” employees or of your “promotable” employees tend to come from one department. It could be that your manager there is particularly troublesome or commendable and you might not have known had you not been measuring.

Let’s say you’re not really tracking where your hires are coming from. And by the way, since recruiting can be one of the most expensive and essential functions of an organization, you really should be. You’re paying a recruiting firm to bring people in, but it turns out that 80 percent of your applicants and 100 percent of your hires come from Craigslist. Think of the money you could be saving there.

Collecting data can give you amazing insights to help you make your company or non-profit better, more profitable and more effective. Of course, you can’t measure everything. The decision about what to track should be part of your strategic plan. What are your goals in terms of where you’re taking the company…growth, profitability, product mix, market strategy, etc.? The answers to those questions will inform which metrics are going to be important and which are going to be peripheral. You should always include your HR professional in your strategic planning and expect them to be able to tell you how they can help you reach your organizational goals, either as a company or a non-profit.

An HR professional worth their salt can make a lot of difference: reduce costs by identifying and addressing turnover, proposing technology to expedite processes, helping you recognize strengths and weaknesses in your management chain. Together you establish Key Performance Indicators and track them.

<h4>How do I track metrics?</h4>

Plus, it’s not that complicated to track metrics. Your applicant tracking system or any other HRIS probably already has a lot of these reports built in. You may have been collecting data without really even realizing it. Now it’s important to figure out what data you are or can collect and how you can use it to get where you’re headed. Data can give insights that inspire incremental changes that ultimately make a very big difference.

So even if you’re already charging ahead on your strategic plan, don’t fail to check in with an HR professional to learn which metrics you can track that will help you get there faster and more efficiently. And if you need help, call us!

We work with companies on a project basis or on retainer, providing a custom level of HR help designed for your business, with offices in Austin, San Antonio, Dallas and Houston. Contact me at Caroline@valentinehr.com or call (512) 420-8267.

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We work with companies on a project basis or on retainer, providing a custom level of HR help designed for your business, with offices in Austin, San Antonio, Dallas and Houston. Contact me at Caroline@valentinehr.com or call (512) 420-8267.