Friday, June 20, 2008

Time to fill, Turnover %, Cost per Hire are not all the Metrics you Need!

So many times when I ask the question, "What are you measuring in HR?" I receive the following list of measurements:

  • Time to fill
  • Cost per Hire
  • Turnover %
  • Recruiting sources %
  • EEO recruiting %
What I don't hear is the linkage to business strategy with these metrics.

For example, take "time to fill", OK great, it took you 30 days to find a new employee. Where is the measure that shows that the new employee wasn't qualified and left in 120 days? Make sure when you calculate time to fill you also include quality of hire. What is their performance rating at 90 days?

Does it matter if your cost per hire is below the national average when you analyze new hire data and find that management satisfaction with those hires is low and that turnover with new hires is 50%? How does that impact revenue?

Turnover is a universal measure. I see a trend in looking at turnover in more granular way. For example, analyzing turnover further by engagement level and by performance rating. What would you do if you found out all your most loyal and highest preforming individuals are leaving at a rate of 50%? What impact would this have on customers and productivity?

By looking at these types of measures you can play detective and get to causation, which will allow HR to solve business problems and impact the bottom line!

Friday, June 13, 2008

Who should measure HR?

That sounds like a very simple question with a very obvious answer.

Over the last few months working with clients, I have noticed that when we as consultants go into organizations to discuss metrics something very troubling has been happening.

When we have discussions about HR metrics more times than not, OPERATIONS and CUSTOMER SERVICE management are leading those efforts.

Why is that?

Why is HR not leading the metrics projects? If we are in charge of people and their performance why can't we also measure the people and performance?

I have my own opinions, but please post your comments below!

Wednesday, June 11, 2008

Why Measure the Effectiveness of HR?

In today's economic conditions, I believe it is critically important for HR professionals to show value to organizations. We have heard "seat at the table" and "business partner" and "credible resource." I say, "Who cares!" What matters is that what your are delivering is adding value to the business. Value is either an increase in revenue a decrease in cost or risk reduction.

So, how do you know if you are adding value to the business? ASK THE BUSINESS LEADERS.

I am worried about our profession. I think we are at a critical juncture. We have been talking so long about being strategic, and sitting at the "table", that we have not focused on results.

As Sue Meisinger, retiring SHRM President and CEO, stated, "Stop asking for a seat in the executive office and instead ask yourself: How can I leverage what I know about Human Resources to help shape and serve the strategy of my organization?

In our experience, when you ask business leaders about how HR is performing they are not shy about giving feedback. Use this feedback and set metrics for your department. Monitor those closely and communicate RESULTS. Maybe then we can stop asking for a seat and actually get an invitation!