It’s all too easy to embrace metrics so fully that your job consists entirely of coding, tracking, analyzing, and defending your metrics. Whoa! Pick a few meaningful ones and let the rest go.
A good metric is one that provides decision makers with the data they need to make fact-based decisions, says BLR’s The HR Red Book® (officially known as What to Do About Personnel Problems in [Your State]).
Making a Metric Meaningful
Take a look at one example of a metric—measuring turnover—to see how to make it more meaningful for decision makers.
The baseline measure is percent of employees who left the company during the year. That’s useful information.
However, it is probably more useful to know how many of those people left voluntarily as opposed to those who left involuntarily.
Even more useful might be a metric that also measures the number of employees who left voluntarily who were among the company’s top performers.
Going one step further, if the company is losing top performers, management will want to know if the turnover is companywide or concentrated in one department.
Now, you’ve got data that can drive decision making. The company can act to identify the reasons top people are leaving and take steps to correct the situation.
Want funding for HR? Metrics tell management about your contributions. Which to use, how to calculate? BLR’s 90-minute January 8, 2009, audio conference will get you up to speed. Read more.
Standards for the Standards
Often, a metric isn’t meaningful without a yardstick. For example, let’s assume you hired 50 people during the year with an average time to fill of 6 weeks and a cost per hire (CPH) of $5,000.
It is difficult to know what this means without a benchmark. What was the quality of the people hired? Is a CPH of $5,000 better or worse than you have done in the past? Better or worse than industry averages? Better or worse than our chief competitors’?
To really understand the story behind the numbers, metrics themselves need a benchmark or standard, either internal or external.
Key Considerations for Choosing Metrics
Don’t forget these tips from The HR Red Book:
- Use data that are readily available and can be gathered at regular intervals.
- Avoid soft metrics based on feelings or intuition.
- Use the cost/benefit ratios, formulas, key performance measures, and language your business leaders use.
- Tie metrics directly to the key challenges facing the business.
- Include measures of results and quality, don’t limit the focus to costs.
- Keep it simple; metrics don’t have to be complicated.
Metrics—love them or hate them, but these days you have to have them to demonstrate to management how HR contributes to the bottom line. You have to speak management’s language.
If you are ready to start collecting data and calculating metrics, we recommend a timely audio conference—BLR’s January 8, 2009, “HR Metrics: How to Measure—and Maximize—the Strategic Value of Your Workforce.”
First, you’ll get field-tested practical advice from experts on how you can use HR metrics to become a valued member of your organization’s management team, which metrics to use, and how to calculate them. Then, you get turn the tables and the experts will answer your specific questions.
Speak Management’s Language
This conference will help you become a true strategic partner at the management table. You’ll learn:
- Why it’s absolutely critical, in today’s tough economy, to place bottom-line values on what you do in HR
- The most important HR metrics you should measure in your organization (with detailed explanations of the math involved)
- How to build data-gathering into your everyday procedures, so that the HR numbers you need will be there automatically
- Steps you can take to benchmark your HR metrics against other organizations’ (and to compare the numbers for your internal HR initiatives against those you outsource)
- What you can do in 2009 to begin communicating your HR numbers more effectively to your organization’s top leaders and executives
- The most common mistakes employers make with HR metrics—and how you can avoid repeating them
Heading up to the C-suite? Be ready to speak management’s language—attend our in-depth HR Metrics audio conference on January 8, 2009. Can’t attend? Preorder the CD. Get more information, register, or pre-order the CD.
The date is January 8, 2009. The time, 1:30 p.m. to 3 p.m. (Eastern time—adjust for your time zone.) As with all BLR audio conferences, one fee trains all the staff you can fit around a conference phone, and you can get your (and their) specific phoned-in or e-mailed questions answered in an extensive Q&A that follows the presentation. Your satisfaction is assured or you get a full refund.
What if you can’t attend on that date? Preorder the conference CD. Get more information, register, or preorder the CD.