Measuring the success of business plans, processes and programs is essential within every department of an organization. However, metrics for Human Resources are often less tangible and therefore more difficult to measure. This can make it challenging to illustrate and prove the department’s value and can also lead some people to believe that measuring HR value is not possible.
Over the past two decades, it has become increasingly important to quantify the successes of the Human Resources department and a large number of metrics have come to the forefront in our field. There are measures on everything from turnover to recruitment efficiency to employee productivity. One benefit of these metrics is that tracking the success of HR programs and initiatives allows us to clearly define the value HR brings to the organization. These measurable results are also much easier for senior management to understand, as they translate into how HR is impacting the business’ bottom line.
People costs usually constitute an organization’s largest expense and measuring the HR programs behind your employee base is a large area of opportunity for the department to prove their value and also identify areas for improvement. The following are the five tips to remember when selecting which HR metrics to begin tracking:
- Metrics should always be connected to business initiatives, strategic objectives and the goals and mission of your organization. Not only can metrics help measure successes of HR programs and their effectiveness of meeting business goals, but they can also help identify areas of improvement and deficiency. Once metrics are established they can be used as an accountability tool for reaching departmental goals, as what gets measured generally gets done. When you have selected your metrics and put together your organization’s HR “scorecard” (essentially a spreadsheet/chart of your selected measures), you will be able to very easily track any progress or setbacks in the metrics. The scorecard will allow you to very clearly display the change in metrics over specific time periods.
- Start small and keep things simple. Just because a metric exists and there is a formula to measure it, does not mean that you are required to track it. Start off small and select only those metrics that are important for your organization and those that are going to help the HR department progress and improve.
- Ensure that insight/perspective can be drawn from each of the measures. No metric is better than any one other metric. However, without some context and explanation, a metric is only a number and doesn’t mean anything. In order to connect the meaning, take some time to investigate the causes of each of the metrics to explain any improvements or deficiencies.
- Benchmark information is nice to have, but not necessary. You may be able to obtain access to metric surveys that will allow you to compare your department across industry and perhaps against your competitors. However, this information is difficult to obtain or may not be available, so it is important to focus internally and improve your selected metrics over time.
- Tracking too many metrics can be as ineffective as not tracking at all. This ties back into keeping it simple and ensuring you can connect meaning to each of the metrics. If you set out to track every human resources metric under the sun, you will be wasting your time and your organization’s resources. As a human resources professional, your time is better spent focusing on a few metrics that are going to help you pinpoint your organization’s people narrative and how that is impacting any strategic goals you are attempting to reach.
It can seem like a daunting task when you first set out to select the metrics that will help your organization succeed and put together your scorecard. However if you follow these five tips, you will be able to select those metrics that are most important to your organization and then begin to measure your progress. An initial measure is a good spot test for your organization, but in order to really make the most out of your efforts, a commitment to tracking the metrics over an extended period of time is necessary. This will ensure that the progression over time will be very clear and will allow you to make strategic improvements to your human resources programs that will in turn help your organization achieve its strategic goals.