Few areas in the human resources world have received as much attention as HR analytics. Yet many companies wonder: Are we doing this right? Are we measuring the things that really matter and using that information to change the trajectory of the company in a positive way? In a session at the 2017 SHRM Annual Conference, Shane Yount, principal of Competitive Solutions, Inc., facilitated a conversation on how to identify the HR metrics that really matter and drive sustainable business processes.
Understanding HR Metrics
According to Yount, the whole point of metrics is to determine whether we're winning or losing. Focusing on metrics that don't fundamentally add to the company's success or bottom line is a waste of time. Yount suggests that companies find ways to simplify their metrics. It is HR's job to create an environment where metrics matter. This all starts with understanding what is significant to the business, and then tying analytical activities back to those objectives.
Why Metrics Matter
Metrics can help foster deeper levels of engagement and better performance. As Yount noted in his presentation, HR metrics provide a way to focus your team's performance and drive focus, urgency, and accountability. Doing this starts with building systems that drive clarity, connectivity, and consistency. It is important to not put your energy into generating metrics and data that few people will understand or use. Ensure that you can articulate a clear business case for each metric you're focused on. From there, it can be much easier to build buy-in and engagement across diverse audiences within the business.
When HR leaders develop the necessary acumen and systems required to run the business, it can free up leaders' time so they can dedicate time required to transform the business. Often, metrics are a passive report. Like a thermometer, it tells you if you have a fever, but doesn't make you better. Instead, aim to deliver metrics that give you more control. The issues that matter the most will vary from business to business, but strong places to start include:
- Continuous pool of quality candidates
Use Scorecards to Visualize Metrics
Creating a visual scorecard can make it easier to quickly audit how processes are moving forward. Use green and red to denote progress – and make ready your agenda. Another idea is to group status updates by theme and highlight whether you are winning or losing. Break metrics into sub-metrics to get to the level of aspects that can be controlled. For example, if your metrics are related to hiring, you might break those down into more specific topics such as job descriptions created, open positions hired, candidates sourced, or interviews conducted. Delegate metrics to departments or individuals with the authority to really control them. Use the scorecard as a tool to set the agenda for meetings and assign the most critical items to be completed.
If you can't change the red due to other areas of the organization, break those points down into sub-metrics until you get to the areas you can control. Hand off the red metrics to the groups that are truly in control of them. Frame action items in response to red items, and establish personal accountability over a specific timeframe for solving these issues.
Ultimately, using HR metrics to drive performance improvement requires data, dialog, and development. Metrics that matter give us data so we can ultimately take action. Follow a process that ensures you begin meetings with metric data in such a way that it’s relatively easy to:
- Set the tone and priorities;
- Look at your metrics in terms of whether you're winning or losing; and
- Use that data to either set specific next steps with clear accountability or affirm continuing forward with your existing strategic direction.