Tag Archives: hr metrics

Six hints you’re an HR metrics hero

Here’s to the time I ripped off the Buzzfeed listicle format to promote one of our upcoming HR Metrics & Analytics events … enjoy!

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Tie HR Metrics to Business Performance Measures

The value of the dashboard or metric varies by the person using the information – for instance, a CEO will want different information than a line manager. Kym Burke, Vice President of HRConnect, suggests HR Shared Services Centers look for ways to tie HR metrics to business and company performance measures.

1. It is one thing for data analysts to discover and digest best practices related to talent through the use of data analytics, but how can this knowledge be imparted to personnel managers?

Personnel – or people – managers must know how to do talent management, which is more than dealing with day-to-day performance issues. If they understand and advocate resource planning and talent reviews, they will be interested in the data available to them through Human Capital Management (HCM) systems. At the same time, they are not analysts and have limited time to dig into the data, so the HR organization should understand their information needs and design reports or dashboards to give them the data they need. Moreover, the role of the HR Business Partner becomes even more critical in this model to help the people manager interpret and apply the data to their work situation and business environment. Lastly, offering this information just-in-time makes it relevant and designing it in bite-size formats makes it digestible and easy-to-read/-use.

2. For large companies in particular, as human resources processes become more automated, HR professionals are starting to drown in large volumes of data related to job performance and satisfaction. Could you recommend any dashboards or metrics that you think work particularly well?

Always look for ways to tie HR metrics to business and company performance measures. And, remember that the value of the dashboard or metric varies by the person using the information: a CEO will want different information than a line manager. Having said that, the cost of talent really seems to resonate with most stakeholders: retention and turnover data, including acquisition costs, time-to-hire or time-to-productivity, turnover percentages, high volatility areas/jobs and other relevant metrics. Managers also request dashboards that give them daily insight into their workforce; they are interested in headcount, roles, compensation, leaves and performance as well as a way to view history to look for trends. Leaders often ask for some of the “big data” metrics that we are just beginning to explore, where we mix HR, sales, finance and external benchmark data to create a glimpse into the highest potential employees that are significant contributors to an organization’s value.

3. What metrics do you depend on to tell you about your organization’s employee retention and whether an organization is meeting its leadership and recruiting targets?

We use much of the turnover data mentioned earlier, including cost of acquisition, turnover percentages, reasons for hire and termination, sheer volume as a whole and by role, demographics and more. We also use an all-employee survey to measure engagement – this data is cut by team and manager and provided to the business to support specific business unit and local team action planning and individual development plans. We also look at continuing education costs: tuition reimbursement usage, learning utilization, training costs and contingent labor metrics.

4. Do you have any suggestions for creating effective employee surveys?

Keep it simple and consistent to check progress. Make it available – we do our survey online, which can be accessed anywhere, anytime and encourage employees to do it at work access points if they haven’t completed it. Offer incentives to encourage participation – limited data makes the instrument invalid. Consider “cuts” of data and who will want to know what. Mostly, consider it as one data point in a much bigger picture.

5. What has changed in the HR Shared Services industry and what excites you for the future?

The availability and reliability of software-as-a-service applications in the HR arena has changed what we can do and how we do it. There is less reliance on often scarce and expensive internal and external technology resources; it has been replaced by HR user communities and common practices and processes. Access and availability is expanding, which keeps people top of mind for business leaders. The systems also force clarity, transparency, performance and simplicity in a variety of ways: roles, process, performance, communication and management. 

I’m excited that HR professionals – who have always been the “people” people – can now speak the language that business leaders and Wall Street understand, that we can tie employee engagement and talent management to productivity, revenue generation and financial success. We’re at our infancy in this space, so it will be exciting to see what the future brings. I’m also excited about the evolving ease and simplicity of the systems to drive customer satisfaction – this makes adoption and usage a no-brainer. I’m also excited to see how the workforce will use this information to revive their passion and engagement in what their companies are trying to achieve and how to build their brands – this will have universal impact.

Roll Out New Value Propositions For Your Shared Services Center

Each transaction is a customer interaction. So it’s incumbent upon managers to reinforce their teams with continuous improvement and customer service training on all levels in order to increase the shared service center’s value propositions. Jim Berry, Director, Customer Service & Innovation, Schneider Electric, shows how to do so in six areas ; cost reduction, quality, people, customer intimacy, transparency and predictability.

1. What factors are involved in creating a more efficient Global HR Shared Service Center?
You must first change the mindset of your organization to truly focus on the customer. They must recognize the value of their daily work to the organization. They must view each transaction as a customer interaction- not just a transaction.

Once your team has a customer mindset, you reinforce it with continuous improvement and customer service training at ALL levels. Finally, you keep it alive by making it part of your team’s daily conversation. You do this by reference in team meeting, visual aide (posters, desk toys), appointing an employee champion in each location, constant refresher of the value proposition, adding the value proposition to the hiring process to ensure you are bringing in the right people, team contests that reward people for customer centric behaviors, and more.

2. What is the biggest value a Shared Service Center can add to an organization beyond cost reduction?
A shared service center can add value to the business in a number of areas. We have expanded the conversation by rolling out a new value proposition that includes the following six areas: Cost Reduction, Quality, People, Customer Intimacy, Transparency, and Predictability. Of these, predictability and quality seem to be very well accepted in business conversations.

3. What are some Shared Services best practices and how do you benchmark your services?
Shared service centers in general tend to be a little bulky and have difficulty changing quickly. As a result, we have started having horizon meetings with the business leaders. These meetings are designed to discuss anticipated business needs 1-3 years out. Shared Services can then determine how best to support these needs, and change before the need becomes and issue. We have implemented global networks to discuss both customer service and continuous improvement. These networks promote best practice sharing in these areas and ensure that we have focus on these topics in all regions.

4. What are three of the biggest challenges or mistakes you see organizations make when implementing a Shared Services Center?
Focus too much on cost reduction and not on adding business value (which of course can include cost reduction) not investing some of the savings produced back into new efficiencies for the shared service center Internal Service Providers do not “Act” and “Think” like a business. This makes them susceptible to outsourcing when vendors come in with an outside approach.

5. Is there a new or up-and-coming technology within the space that you’re particularly excited about?
The technology is not new, but I am excited about the possibility of connecting with our customers (employees and managers) through mobile applications. This solves an ongoing communication difficulty we have had reaching our blue collar population. Not everyone has computer access- but almost everyone globally has smart phone access. Finding ways to connect with all of our employees over multiple time zones- when they want to connect- is extremely exciting.

Turn Your HR Department Into A Business Driver By Incorporating Metrics

In this interview, Human Resources Consultant Shad Raza talks about the importance of incorporating HR metrics throughout an organization’s business plan and how metrics can elevate the department from a cost center to a business driver.

hrh media: How can an organization integrate HR metrics throughout its entire business plan?

To make a business operation effective, a business plan must be translated into functional metrics without deviating from the sanctity of business objectives. Similarly, HR metrics must be aligned with the business plan for the optimum utilization of human capital. For integration with a business plan, HR professionals should drill down into every aspect of their business objectives and align those with people performance.

The success of integration is elevated when it is clearly spelt out in “actionable” terms and is understood by the entire workforce. Once it is aligned, an organization must accelerate its performance level by providing the right support and organizational system.

hrh media: What are some current or evolving HR metrics that may be unfamiliar to many human resources professionals? Furthermore, why should they make an effort to learn them?

There are various traditional and new metrics available such as HRIS, benchmarking, data mining, dashboards, predictive analysis and HR score cards or balanced score cards that are being prevailed and used by HR professionals based on their business needs. These metrics provide an advantage to HR professionals to not only align to the strategic goals of the organization but to bridge the gap by identifying and fulfilling the performance levels in a timely manner. Hence, they must learn, adapt and contribute.

hrh media: On a basic level, how can human resources professionals use metrics to prove to upper management that their department is a business driver and not a cost center?

If used properly, HR metrics cannot only help an HR professional to enhance organizational performance, but it can also prove that HR is a business driver like other functions, which helps an organization achieve and sustain high-growth performance. Translating HR’s tactical and strategic intentions into effective monetary terms is one of the basic tenets of HR metrics.

Therefore, extracting the right data, doing the appropriate data mining, converting them into the monetary term, presenting it to the right people at the right time and utilizing these metrics in a timely way is the crux of HR metrics. Hence, HR professionals must learn, deploy and incorporate metrics into an organizational reporting system, which can drastically change the misconception of HR in the eyes of upper management. It also improves accuracy of management decisions.

hrh media: What are some battle-tested metrics that are still relevant today?

HR Score Card & Balanced Score Card are two of the most powerful and proven metrics that can boost organizational performance, but there are some organizations where they have synchronized these score cards with Six Sigma, too.

The Top 13 HR Metrics For 2013

Human capital is a company’s biggest asset, but it can also be its biggest liability. Businesses can be made or broken by the quality of its employees. Success, therefore, is often a matter of attracting the best new recruits while also ensuring the happiness of current employees in order to retain the strongest personnel.

Human resources professionals are placing a large emphasis on reducing administrative costs while increasing productivity and job satisfaction. Not surprisingly, retention and cost control are at the top of the list of employer objectives, according to the 7th annual MetLife Study of Employee Benefits Trends.

With fewer resources and more pressure to produce, human resources professionals are tasked with identifying what their employees are most concerned about in their work life in an effort to ensure their loyalty. Beyond salary and wages, the most important factor in employee loyalty is health, retirement and insurance benefits. Advancement opportunities and company culture also play a large part in employee loyalty, according to the survey.

So, how can human resources professionals align their employer’s objectives of making and saving money with their employee’s priorities? One way is by the use of human resources metrics.

In order to streamline your company’s goals, human resources should focus on four focus areas; recruiting, retention, staffing and training, and development, according to CoreCentive, a human capital management consulting firm.

Recruiting metrics quantify new hire performance, the impact of a poor new hire as well as turnover rates and return on investment. Retention metrics quantify turnover rates in addition to average tenure and the worth of veteran workers.

Training and development metrics measure training process time and costs and how professional development processes help businesses achieve their business goals. Staffing metrics measure cost per hire, recruiting efficiency ratio and the cost to replace an employee.

Below is a list of the most important human resources metrics your company should be looking into in 2013.

The Top 13 HR Metrics for 2013

Absence Rate – Shows how many days your workers are missing, which could be an indication of their satisfaction.
The number of days absent per month / (average number of employees during a month x the number of workdays)

Benefit Cost – Determine the cost of benefits packages per employee.
(Total cost of employee benefit / total number of employees)

Benefit as a Percent of Salary – Determine the cost of benefits as the percentage of an employee’s salary.
(Annual benefits cost / Annual salary)

Cost Per Hire – How much does your organization really spend per new hire?
(Recruitment costs / (compensation cost + benefit cost)

Performance Goals – The percentage of performance goals met or exceeded
(The number of performance goals met or exceeded / Total number of performance goals)

Return on Investment – What is the organization’s ROI per employee?
(Total benefit – total costs) x 100

Revenue Per Employee – Measure how much each employee earns for the company.
(Revenue / Total number of employees)

Satisfaction – Tracking employee satisfaction is difficult, but surveys can help you gauge this metric.

Tenure – Determine the average amount of time an employee has been with the company.
(Average number of years of service at the organization across all employees)

Time to Fill – What is the cost of the time it takes to fill open positions?
(Total days taken to fill a job / Number hired)

Training Development Hours – Streamline your professional development costs.
(Sum of total training hours / total number of employees)

Turnover – Spells out how many employees depart your organization per year
(The number of employees exiting the job during a one year period / Average actual number of employees during the same period)

Turnover Costs – How much money are you losing when an employee leaves? Vacancy, new hiring and new training costs can add up.
(Total costs of separation + vacancy + replacement + training)
Source: Employer’s Resource Council, CoreCentive

Align Metrics With Your Business Plan to Optimize Human Capital

Shad Raza, a human resources consultant, makes a case for HR metrics in this interview with hrh media.

hrh media: How can an organization integrate HR metrics throughout its entire business plan?

To make a business operation effective, a business plan must be translated into functional metrics without deviating from the sanctity of business objectives. Similarly, HR metrics must be aligned with the business plan for the optimum utilization of human capital. For integration with a business plan, HR professionals can drill down into every aspect of business objectives and align those with people performance.

The success of integration is elevated when it is clearly spelt out in “actionable” terms and is understood by the workforce. Once it is aligned, an organization must accelerate its performance level by providing the right support and organizational system.

hrh media: What are some current or evolving HR metrics that may be unfamiliar to many human resources professionals and why should they make an effort to learn them?

There are various traditional and new metrics such as HRIS, benchmarking, data mining, dashboards, predictive analysis and HR score cards or balanced score cards that are being prevailed and used by HR professionals based on their business needs.

These metrics provide an advantage to HR professionals to not only align to the strategic goals of the organization but to bridge the gap by identifying and fulfilling the performance levels in a timely manner. Hence, they must learn, adapt and contribute.

hrh media: On a basic level, how can human resources professionals use metrics to prove to upper management that their department is a business driver and not a cost center?

If used properly, HR metrics cannot only help an HR professional to enhance organizational performance, but it can also prove that HR is a business driver like other functions, which helps an organization achieve and sustain high-growth performance. Translating HR’s tactical & strategic intents into effective monetary terms is one of the basic tenets of HR metrics. Therefore, extracting the right data, doing the appropriate data mining, converting them into the monetary term, presenting it to the right people at the right time and utilizing these metrics timely is the crux of HR metrics.

Hence, HR professionals must learn, deploy and incorporate metrics in an organizational reporting system, which can drastically change the misconception of HR in upper management. It also improves the accuracy in management decisions.

hrh media: What are some battle-tested metrics that are still relevant today?

HR Score Card & Balanced Score Card are two of the most powerful and proven metrics that can boost organizational performance but there are some organizations where they have synchronized these score cards with Six Sigma too.

How United Airlines’ Metrics Helped Form A Collaborative Employee Culture

In this interview, Brendan Neuman, Human Capital Metrics Analyst at United Airlines, shares how United Airlines redefined itself as a workforce, and ultimately as an airline, after its merger with Continental Airlines. The corporation was faced with blending two different subsidiaries into a balanced company with a healthy culture and a collaborative work environment.

hrh media: How has the use of human resources metrics changed or shaped United Airlines hiring process?

We relied on metrics extensively throughout the process of merging United and Continental Airlines. We paid especially close attention to ensure that the newly merged company looked like its two subsidiaries in terms of gender and ethnicity demographics. We developed weekly dashboards to provide status updates for each of our operating and corporate divisions.

hrh media: In an industry that has weathered a fair share of setbacks in recent years, would you say United has prospered thanks to its employee-centric culture? If so, how has this culture been achieved and maintained?

We have invested significant effort in forming the culture of the new company. This has been accomplished through a variety of engagement and culture surveys conducted throughout the business. I think our focus on getting the culture right and emphasizing a safe and collaborative work environment will provide us with a distinct competitive advantage in the marketplace.

We track the evolving culture with a measurement model that involves looking not only at how favorably people evaluate tenets of the culture, but how consistently groups of individuals share their perceptions of the culture. We plan to continue this approach of measuring the strength and consistency of perceptions over time.

hrh media: Often when employee feedback is aggregated into groups, the measurement can become skewed. How does United Airlines wade through the data to determine the perception of any one employee toward the company or their job?

We are most interested in exploring how groups of individuals perceive the company or their jobs. We have tested a variety of group agreement statistics which allow us to understand how representative a group mean is for the majority of its members. In general, if we determine that members of one group responded very differently from each other, we have less confidence in the average of their responses.

hrh media: Would you mind briefly explaining United’s group agreement indices and how it has been applied throughout the organization?

We have done comparative analyses using a few of the most common indices for group agreement including “rwg” and the standard deviation. What we have settled on, and what I will be presenting at the Summit is a statistic called “awg”. This statistic allows us to compare the variance observed within a group relative to the maximum possible variance, given the group size and group mean.

What that means from a practical perspective is that we can provide our internal customers and HR partners with some context to the data we’re reporting. Prior to using this approach, our customers often wondered if the data were skewed by the effect of one or two extreme scores. Now we can objectively tell them if that is the case.

hrh media: Looking forward, how do you feel the use of human resources metrics will impact your staffing processes as well as those implemented industry wide?

We are currently designing measurement solutions to gather feedback on all individuals who apply to work for United. We are interested not only in the efficacy of our recruiting and selection processes, but also want to develop a benchmark for United’s brand as both an employer and an airline.