Turn to any HR magazine, blog, or conference, and you are certain to hear the term “HR Metrics” before too long. There are several terms that go along with metrics, so let’s take a moment to define and differentiate each of them:
- Measures (or measurements) are actual numbers and small bits of data used to create the metrics. For example, the number of full time equivalents in your organization and the number of terminations in a year are both measurements. As they say, Garbage In, Garbage Out – so be careful that you are gathering accurate measurements.
- Metrics are the ratios or percentages or numbers that are created using the measures. To continue the example above, if you divide the number of terminations by the number of employees in a given time period, you create the metric of a Turnover Rate for that time period.
- Analytics take metrics and apply them to trends and future-focused events. Analytics… well… analyze the data into useful information that a company can use to make future decisions. Another way to think about it is that analytics turn numbers into a story, often to help pinpoint a need for change in the organization. When used to identify future needs, they are commonly referred to as predictive
- Big Data is a conglomeration of metrics and analytics using a huge (big) pool of data. HR professionals can look to big data numbers to use as benchmarks where relevant.
HR professionals can benefit from employing metrics and analytics into their presentations. Presentations needn’t be formal executive PowerPoint slides; they can be as simple as having a 1-on-1 conversation with your boss and trying to sell him or her on an idea that you have.
I believe that HR Metrics is a hot topic because it provides some sort of measurement to HR’s value to an organization. HR is sometimes viewed as an expense in an organization. Metrics help dispel that viewpoint for effective HR functions. For example, if you can show that this year’s turnover rate is lower than last year, and can tie that to a dollar amount, you can cite the ROI of your new wellness initiative or the cost-benefit analysis of your increase in benefits.
For example, your company is tracking turnover rate, training time, and average time-to-fill for recruiting your talent. In watching the month-to-month metrics on these three items, you notice that the turnover rate has steadily increased over the past year, actual training time has decreased, and the time-to-fill has decreased. What does this tell you?
Using this limited information, we might look at the following options:
- Look at creating a more formal Onboarding program to provide more robust training at the beginning of employment.
- Investigate the recruiting process – are we hiring warm bodies, or are we doing our due diligence to hire the right person? As Jim Collins would say in his book “Good to Great,” are we making sure we are getting the right people on the bus, in the right seats?
- Interview workers and managers in the organization – especially if the turnover is high in one department – to discern if there is a communication error or something more egregious happening. You know the adage: people don’t leave jobs; they leave managers. Taking the time to gather this qualitative data will help you determine if you need to implement manager training, get executive coaching for one particular manager, or look for a way to manage the employee out of the organization.
As you can see, metrics provide the information, which we gather together to tell a story (analytics) to present a business case about WHY we need to change or offer a program. Metrics are a great tool to use to overcome the “because we’ve always done it this way” mentality, because numbers don’t lie.
Jennifer Currence, MBA, SPHR, SHRM-SCP, is president of OnCore Management Solutions. She is an HR consultant, corporate trainer, and business coach based in Tampa, Florida.