HR Metrics & Its Alignment to Business Success

July 23, 20193:00 pm25 views
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Workforce analytics is a part of a new set for critical skills for HR, business, and leadership. Companies that devote valuable time and resources to build workforce analytics capabilities will be better positioned to stand ahead from their competitors in the future. Dr Arun Krishnan, founder and CEO of nFactorial Analytical Sciences, commented that the key drivers for business and industry in general lie in the need for more efficient talent acquisitions. This, fortunately, can be obtained from data-driven human resources analytics.

Nonetheless, companies are seen to progress slowly in developing full analytical capabilities. It becomes a multi-year process to complete a significant impact from analytics. Deloitte study on Global Human Capital Trends reported that only 8 percent organisations believed that they have a strong HR analytics team in place. Research showed that the evolutionary journey to mature analytics typically lasts five to seven years, respectively.

See also: New Metrics to Yield Strategic Insights on Recruitment Success

HR metrics, the survey showed, is seen to be foundational for mature analytical capabilities. Companies should take advantage of operational measures and tactical as well as advanced reporting that will not only benefit the business but HR customers as well. In addition, HR metrics can be immensely valuable to an organisation when they are aligned to specific HR and broader business objective.

Benefits of HR metrics

HR metrics is often described as a measurement used to determine the value effectiveness of human resources initiatives in areas, including turnover, training, ROI, costs of labour, etc. According to Enabling Business Results with HR survey, metrics play a vital role that allows companies to measure HR program performance while providing actionable insights and information. This results in more efficient and effective HR practices. Stated in the survey, previously data was mostly stagnant and siloed within disparate systems across both HR function and organisation as a whole. In this case, matrics are enabling businesses to create actionable and meaningful guidance and direction. Other than that, data-driven metrics can also support HR in terms of its ability to explain what is happening within an organisation and why, providing information regarding people while creating a link to overall business performance, and assessing issues while building continuous improvements.

How to start an HR metrics that matter

Aligning HR metrics with business purpose is important. While you might have a bunch of considerations when start sailing on HR measurements journey, you should start the process with these leading practices proposed by David Fineman, a specialist leader and the author of Enabling Business Results with HR survey. These practices will help you stay focus and align on the matric results that you wish to get. 

  1. Start where you are by assessing organisation current HR metrics capabilities and needs to gain a clear insight into potential gaps. You should focus on tasks that are easy to be done while developing a longer-term analytics road map.
  2. Ask the right questions by understanding the questions that matter most to HR and business broader. For example, what are your business priority? Which part do you want to improve first? What is your business goal?
  3. Create right-size metrics by matching your metrics and measurements with your questions.
  4. Accelerate insights by setting automation on your delivery of key information to HR and organisation stakeholders.
  5. Do user engagement and visualisation by creating outputs that deliver insights end-user truly need in forms and designs that will enable HR and business to execute fact-based decision making.
  6. Create a fact-driven culture by embedded metrics and reporting capabilities into Hr decision making processes and procedures.
  7. Remember change management by knowing how and when to communicate changes to users and HR customers. Point to remember is whenever changes are made, additional business risk is always introduced.

Beyond HR metrics

Albeit HR metrics place great importance in business success, the latest survey by Deloitte showed that a fundamental change is underway. Businesses should no longer only focus on traditional metrics. Rather, organisations should increase their attention on the basis of their relationship with their workers, customers, communities, and impact on society at large. This changes the focus of business enterprises into social enterprises that will, absolutely, result in bigger triumph. These changes in relationships will help leaders as well as businesses to listen, enhance collaboration, build trust, credibility, and consistency better with their customers or constituents. Additionally, you can also maintain your organisation’s reputation as well as attract, retain, and engage your critical workers while cultivating loyalty amongst your customers.

Read also: Time to Hire: An Old-Fashioned HR Metric We Can Still Utilise