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.


An HR Weaver said...

You are ABSOLUTELY right on the impact numbers! Are you starting to see HR ROI get some traction both in the profession and in the business community? If you were an HR leader, how would you make this metric well understood and valuable?

Unknown said...

Hi Nancy:

Great questions. I do see HR ROI getting a lot of traction especially now as CEO's are far more demanding regarding how ALL of their investments have performed. Human Capital is just usually the biggest investment a firm makes. (60-80% of most service based org budgets)

So, with all of that said, If I were an HR leader in an organization I would make sure that I worked VERY closely with the CFO to make sure the calculation is accurate and one that senior leadership understands and buys into.

I think that ROI is just one of many that have to be communicated, understood and valued by leadership.

As far as getting HR as a community to buy into this metric...I have been trying!! The calculation can be a bit daunting.

I think you have inspired a new blog post!

Thanks for reading and your great questions-

Anonymous said...

What's the best metric for measuring behavior change from a HR initiative? Specifically, I've been tasked with rolling out a leadership philosophy and set of skills to our leadership and management team. While I can measure the number of events, participants, costs, material developed,etc. I think it would be important to measure whether there was a lasting change in the behavior of the leaders that have taken the course?


Unknown said...

Well that is a great question. I believe you are on the right path. What matters in your situation is:

1. Did behavior change?
2. Did the behavior change lead to the desired results?

So, to see if behavior changes you would need perhaps a performance type appraisal, (maybe a 360) before and after the initiative. Look at the gaps and see if there is a correlation between new skills and new behaviors.

Results, (level 4 on Kirkpatrick's Evaluation of training model) is a bit harder to come by, especially in the leadership skills area. You would need to track goals over time to see if there is a change in goal attainment and where possible, QUANTIFY those goals. So, if a leader had a goal of retaining 80% of his staff after he had been through leadership training. If that manager exceeded that goal by 5%, what was the cost of retaining that extra 5%. (replacement costs).

The key is making the results as quantifiable as possible, that speaks to impact not tracking number of events and participants.

Hopefully that makes sense...

Thanks for reading and posting your question-