Monday, March 28, 2011

The 5 Most Important Talent Management Metrics

As the economy slowly thaws, talent has become a top priority for most organizations. Companies are concerned with acquiring the right talent, retaining top talent and developing future talent. Leadership intuitively knows that the better the talent IN the organization, the better the results FOR the organization.

So, what does this all mean for HR professionals. No pressure HR, but CEO's are risk adverse these days and demanding of data for fact-based decisions. HR will have to step up its measurement game where talent is concerned. I believe workforce planning and analytics will become critical from a supply and demand of talent perspective.

I also believe that tracking and measuring current talent becomes critically important so companies sustain a competitive advantage over its competition.

I believe there are several critical measures when it comes to talent. If I had to choose my top 5, it would be these:

1) Quality of Hire
2) Employee Performance
3) Goal Attainment
4) Turnover by performance, by engagement
5) Employee Engagement scores by performance, manager, department

It is important to know if you are getting quality candidates in the door. There is not one measure for quality of hire, but you can use a combination of new hire performance rating, new hire failure rates and retention rates.

A strong performance management system that allows for an objective quantitative way to measure performance is also critical for organizations to know who is contributing and who isn't. The performance management system should also enable the organization to see who is reaching goals and who isn't.

Turnover is a critical measure but not in its usual form. I think turnover should be segmented just like marketing segments their markets and customers. Look at turnover in a more granular way. For example, analyze turnover and employee performance. Are your HIPO's leaving at a great rate than non-HIPO's? Look at turnover by employee engagement scores, are your highly engaged leaving at a higher rate than your non-engaged staff? Better yet, look at turnover with engagement and performance scores. Are your highly engaged and HIPO's leaving at a higher rate?

The answers and actions to the questions above could make you an HR Rock Star in your organization! Tell me what you measure in regards to your talent...

Monday, March 21, 2011

The HOW's and WHY's of Getting Into HR

I was just asked recently to address a group of HR students. The discussion is to be centered around, "How to Get Into HR." So, I have been thinking a lot about that subject. My own journey into HR was not the typical HR career path. I started in sales, when over to procurement, spent sometime in accounts payable and receivable and then landed in payroll. And the rest is history!

As I think about the HOW, I can't help but to think about the WHY. For me, back in the late eighties, early nineties, HR was very interesting to me. In the small computer reseller I worked for, HR was involved in everything. From training to going on sales calls. So, the WHY for me was that I could use my business experience to bring a different perspective to HR. My next move was to a larger organization where HR was more siloed and had a more traditional HR approach. I HATED that. Fortunately, I was transferred to a smaller division where I reported to the CFO. To this day, I credit that reporting structure for my interest in metrics and analytics.

As a consultant today, the WHY is so much different. I love the strategic part of HR, and of course the analytics and metrics make my heart skip beats. But, it is also about making a difference and making sure this profession survives and receives its due respect.

But I digress....

Here are some of my initial thoughts on how recent graduates can get into HR:

1) Get involved in your local student Chapter of SHRM so you can network and be seen
2) Schedule some informational interviews with top HR individuals in your city
3) Get involved in social media and be SEEN and HEARD. Have a point of view, it will get noticed.
4) Consider spending some time in other functional areas of the business and THEN get into HR. (Business knowledge is in high demand for HR professionals)
5) Do an internship

Help a speaker out....what are your thoughts on the how's and why's of getting into HR?

Tuesday, March 15, 2011

HR Analytics at Google, 8 tips from Prasad Setty

Luk Smeyers, with iNostix is our guest blogger. Thanks Luk for continuing to provide great content!

No HR background

Prasad Setty, a self-described "numbers guy," never expected to find himself in HR, says Andrew McIlvaine in a 2010 article in HREonline. "If you'd asked me in business school if I would be spending time in HR, I would've laughed, because I thought HR was soft and fluffy and that I had no intuition for people issues," says Setty, who holds an MBA from the Wharton School and a master's degree in chemical engineering from Carnegie Mellon University.

VP of People Analytics

And yet today, Setty is happily ensconced in HR at Google Inc., albeit in a numbers-driven role, serving as the company's VP of people analytics. "Google is a great place to try a data-driven approach to HR," says Setty, who joined the Mountain View, Calif.-based technology behemoth in 2006 after stints at McKinsey & Co. and Capital One.

At Google, Setty's mandates includes:

· finding better ways to determine what's on the minds of "Googlers," as the company's employees are called

· making sure top performers stay with the company and continue to innovate throughout their careers

Setty’s 8 tips for HR Analytics

· understand what's important to the organization on a people level (and start measuring it)

· determine what's on the mind of your employees

· measure the impact good managers have (and develop more of them)

· build a decision-making system that avoids cognitive errors

· measure the intention to stay or leave (and not a long satisfaction survey)

· compare retention scores of high performers versus low performers

· be very transparent with results of surveys

· identify low performers and give them the opportunity to course-correct

Not copying best practices

In so doing, he's found a way to match numbers and HR in exciting new ways, encouraging his HR staff to push the boundaries of what can be done within the profession. This is partly out of necessity: Given its unique culture of constant invention, Google simply isn't interested in copying best practices from other large companies, says interviewer McIlvaine.

You can read the full article here.

Monday, March 14, 2011

Don't Just Survey Your Employees: Link Your Data!

I read an excellent article from March 2011's edition of HR Magazine this weekend, entitled, "Prepare for Impact" by Kathryn Tyler. (Membership SHRM National Required to view, insert sad face here...sorry!).

I really was excited to see this article in the magazine as it is a topic not only that I have been passionate about but one that I think is garnering much needed attention to the subject.

The article discusses the importance of using employee engagement data in a far different way than it has typically been used. In the past, we have surveyed our employees, we have broadcasted the results, and we MAY or MAY NOT have taken action on the data.

The article discusses the importance of using and leveraging your engagement data to understand what drives financial results in your organization. In the article, Tyler says there are several puzzle pieces that must fit together so that you can leverage the data:

1. Choosing the metrics to link to employee engagement
2. Determining the logistics of the research
3. Sharing results of the research with employees to create an action plan to achieve improvements.

An example from the article sites Starwood Hotels and Resorts. The global hotel chain linked its engagement data to its guest experience data understanding exactly what drives financial results for the company. If you know what behaviors are driving guest loyalty and revenues, you can focus your investments and priorities making sure those behaviors exist and continue.

What a concept! As we have discussed in this blog before, you can conduct this linkage pretty easily with the tools you have on your desktop. PhD's not needed.

If you are going down the linkage path, here are some tips to remember:
  1. Make sure you link to the right metrics. Look at your industry and company and make sure that you understand what drives your revenue and/or what impacts your strategic execution.
  2. Make sure your data is reliable and valid. This is one of the hardest areas for most HR professionals. When it comes to data hygiene HR hasn't been the best.
  3. Look at how you will be analyzing your data. Data is everywhere in your company. To be able to look at data system wide you have to have a unit of comparison. Whether that unit is by department or by location. You have to compare apples to apples.
  4. Tell a compelling story. Don't just do a show and tell of ALL of you cool data. Paint a picture on what you found out and what it means to YOUR AUDIENCE.
  5. Follow through on your observations and recommendations with action plans that hold managers and employees accountable for change.
Tell me how you are using your engagement data...

Friday, March 4, 2011

How Many Metrics Do You Have? Really?

So many times I am asked to review HR metrics and make recommendations. I can remember meeting with a client last summer. I asked to see their metrics. I was handed pages from an Excel workbook with about 15 tabs with at least 25-40 metrics per tab.

It made me tired, just looking at all that. There was EEO data, there was recruiting data sliced every way imaginable, there was employee relations data, there was training hours per employee by department, location etc. You get my point.

I asked the question, "Who is the recipient of this data?" I was told it went to the leadership team. Poor guys and gals. How could they ever make sense of all that data?

Don't get me wrong some of those 500 metrics were very valuable. But your leadership team does not need to see ALL of those. There are the 3 types of HR Measurement according to Luk Smeyers at INostix:

1. HR Efficiency (HR Tracking/numbers internal HR Dept)
2. HR Effectiveness (HR Programs)
3. HR Impact (outcomes based on investment in human capital)

I would bet the farm that the leadership team described above was looking at HR efficiency and effectiveness measures. I am pretty sure those aren't the ones they lose sleep over. They need to see HR IMPACT measures. They need measures like:

1) Human Capital ROI
2) Revenue per employee
3) Profit per employee
4) Appropriate quality of hire metrics
5) Appropriate productivity and performance metrics

They really don't care about days to fill and which sources your candidates are coming from. That is just HR's J-O-B.

Please keep your HR department efficiency and effectiveness measures between the walls of your HR department. Show the C-Suite your impact measures, that will get their attention and off their Blackberries.

Thursday, March 3, 2011

Why HR Metrics Don’t Work

Thanks again to Luk Smeyers from INostix, Netherlands for guest posting on our blog. Another great topic.

A few days ago, I was reading a digital summary at of the brand new 2nd edition of Wayne Cascio’s and John Boudreau’s book ‘Investing in People’. Especially the chapter ‘hitting the wall in HR measurement’ is my absolute favorite. Let me summarize a few of the ideas.

Hitting the wall in HR measurement

Type "HR measurement" into a search engine, and you get millions of results. Scorecards, metrics, dashboards, data warehouses, surveys, benchmarks, and audits in abundance ratios. The spectrum of HR measurement methodologies seems unlimited. The paradox however is that even when HR measurements are executed well, most organizations typically hit a ‘wall’: HR metrics or measures only rarely drive true strategic change! Boudreau’s and Cascio’s figure (see below) shows how, over time, despite more sophisticated measures, the trend line doesn't seem to be leading to the desired strategic results.

A huge gap

Some HR professionals assume that they have strategic impact by - at best – holding line managers accountable for the outcomes of HR metrics. Proudly they declare that top managers’ bonuses depend in part on the results of an HR scorecard. Unfortunately, there is a major gap between the results of the measurements and their actual impact on the organization. Because descriptive metrics – such as turnover, retention, time to fill, illness rate, etc. – just don’t have a strategic impact. These kind of metrics will never give HR the necessary insights to break through the wall.

What can HR do?

• Moving from descriptive metrics to much more insightful analytics to be able to break through the wall (and understanding the differences between HR metrics and HR analytics)

• Developing more insightful analytics to underpin strategic decision making (and linking with bonus absolutely doesn’t make sense!)

• With HR measurements, focusing much more on the organizational impact of HR investments instead of focusing too much on HR efficiency metrics (like HR costs, HR ratios, cost of hiring, etc)

• Moving from an HR scorecard approach to a Business scorecard philosophy.

Luk Smeyers, iNostix, February 2011