How to Make HR Metrics Work For You

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How to Make HR Metrics Work For You

As for most departments within an organization, measuring effectiveness is an essential part of continuous improvement. Sales departments analyze previous deals to determine their average buy-cycle and use that information to improve their performance, finance departments measure their accounts payable and accounts receivable timelines and use that information to improve cash flow, and so on. However, oftentimes HR metrics are misused. When HR metrics are simply calculated and reported on, the true value of the metrics is lost.

If you are currently re-evaluating your HR metrics system or are looking to implement one at your organization, there are a few things you should consider:

1. Strategize First

Don’t create an HR metrics dashboard, just to have an HR metrics dashboard.

If you begin collecting data on absences, turnovers, and cost per hire but fail to establish a strategy on how you are going to use those metrics, the likelihood of your HR metrics spreadsheet collecting virtual dust increases greatly.

Work with your leadership team to discuss the organization’s workforce in its current state and the vision or goals they have for the future state of the business. Develop these goals with your leadership, strategize your plan to achieve those goals, and then begin thinking about the role HR metrics will play. Having a business approach to HR puts the HR department in a better position as a business partner.

2. Remember the Purpose

Make your metrics reporting meaningful by pairing your data with organizational initiatives. It’s crucial to not get lost in the weeds and remember the primary purpose of analytics is to support and improve decision making.

Be sure you are asking the right questions when it comes to your measurements. If you find that your HR metrics dashboard system, process, or strategy, are no longer being used for that purpose, it’s time to pause, reflect, and revise.

3. Don’t Measure Everything

This notion ties into the importance of both strategy and purpose. It’s easy to get caught up in the excitement of a new HR metrics strategy but you need to resist the urge to measure anything and everything.

Utilize your strategy and purpose to determine which metrics will tell the best story for what you are trying to ultimately analyze and achieve.

Consider your resources. If you have a large HR department with the capacity and technology to take on an HR analysis project across the board of categories, great! If you are a solo-superhero or have minimal resources, it’s probably a good idea to tackle these HR metrics projects on one at a time.

Don’t let your employee engagement, talent management, and human capital in general, fall short of success by using decision-making tactics powered by a well-informed data analysis.

ERC provides HR consulting services for organizations across the nation.

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