You know the old saying: You don’t know where you’re going until you know where you’ve been. Metrics not only tell you where you’ve been, they also indicate how well you’ve done. As HR and ER professionals, you know that your programs, services and initiatives have little weight unless they bring value to employees and your organization.
The days of viewing human capital as merely a cost of doing business are long gone. Today’s business leaders — including HR and ER — must consider the ROI and metrics that gauge the effectiveness of your programs and services. However, don’t confuse metrics with analytics; metrics tell you how things are progressing, while analytics tell you how to fix them.
Top Strategic HR Metrics
HR leaders must operate more strategically in today’s business environment, and that includes using metrics to show how HR functions are supporting organizations’ goals. Five top HR metrics include:
- Revenue per worker - CFOs widely approve of this metric, which measures employee output in dollars. The formula is your company’s annual revenue divided by the average number of full-time employees.
- New hires’ improved performance - Rather than measure all new employees’ improvement, you can focus on employees whose output is already quantified, such as salespeople, call-center personnel and collection agents.
- Turnover rates - This is the rate at which employees leave your organization. Your focus might be on top performers, since their replacement can be costly.
- Revenue lost due to vacancy days - This metric can help you plan recruiting strategies to curb revenue losses while positions remain vacant. When employees leave, there’s a loss in revenue that accumulates until a new hire is onboard.
- Percentage of accomplished HR strategic goals - This metric helps you determine which HR functions have met the goals you’ve set. You can report the findings to the CEO or present the outcomes in presentations before C-suite executives.
First-level Metrics for Progressive Discipline
The key to using metrics successfully is knowing what basic questions to ask first so that you can collect the data needed. To gauge how well you’re handling workplace investigations involving progressive discipline, for example, basic questions might include:
- What’s the average number of days a case stays open?
- How many cases are HR and/or ER reviewing?
- Is the HR/ER team leading the investigation or providing data, documents or testimony to support the case? Cases involving employment law or workplace policy breaches require HR/ER’s expertise and leadership.
- What alleged breaches are involved? Classify the cases by topic, such as sexual harassment, chronic absenteeism or lateness, discrimination, bullying, insubordination, etc.
As cases progress in complexity, more detailed information is needed. At this point, you’ll need to know the number of cases you have open and where they are in the course of the investigation.
The next key bit of data includes what the case involved, or “X.” “X” might refer to a particular age group, such as millennials or boomers, or a protected class, which by law includes women, racial and ethnic groups, disabled workers and older workers.
Next, identify how the case was handled. Was it substantiated, and what action did you take in the case’s disposition? Was a written warning issued or a verbal warning? Or was termination recommended?
Compare this information with data collected on “X”. To find out what percentage of cases involved, say, baby boomers, overlay the related “X” data over the actions taken to close a case. You’ll be able to see what percentage of baby boomers were given verbal warnings or fired.
Lastly, tracking cases by manager or location is important in finding out such things as where training might be needed. Collecting data on managers and worksites and then following up with a metric process could be challenging, but it could help you pinpoint where problems exist.
Deb Muller is the CEO of HR Acuity, a technology solution that combines documentation, process, and human expertise so organizations can meet the challenge of managing employee relations in the modern world. Be proactive. Manage risk. Create a safer workplace.