HR Metrics for HR Strategists

HR Metrics for HR Strategists

The zeal to accumulate data that can be used to help executives manage their businesses is at an all time high. Technological progress, corporate governance needs, relationship management endeavors, enhanced competitiveness, and more have led investors, managers, and employees to seek more data about their organizations. As a result, HR professionals have been intimately involved in the growth of these data depositories. Large software system implementations are providing corporate level data immediately to the desktops of multiple users. Corporate dashboards, and other forms of data sharing and reporting to senior executives and line managers, are appearing in many organizations, both large and small. Thus, access to important metrics about people is receiving more attention than ever.

But what is HR data? And are we delivering HR data to managers in a way that helps them do their jobs? Even more important, to what degree are the data we provide to executives making a real difference in the way that they do business?

What is HR Data?

There are a number of books on human capital and HR scorecards. In these books, you can read about types of HR data that are being used to understand the quality of HR services (e.g. efficiency of selection processes, compensation ratios compared to market, etc.) and basic people issues (e.g. are they absent, leaving, or using various HR services?). Overall, I think you could conclude that the most frequently used HR metrics are data ABOUT employees. We collect data about their turnover, salaries, benefits, absenteeism rates, decisions to start working for us, and more. We collect the data, and we sometimes develop ratios based on the data (e.g. hires per applicants, turnover rates, etc.).

We often supplement our archival data with employee survey data. Thus, instead of inferring things ABOUT our people from information technology (IT) sources, we ask employees to tell us about themselves. We ask if they are satisfied, engaged, how they feel about benefits, what they think about the culture, and more.

But when we reach out to employees and start asking them for data via employee surveys, there is a huge opportunity for more information that is not being seized upon by HR executives. As you develop systems to collect data ABOUT people that are FROM people (e.g. employee surveys), you also can ask those same people questions ABOUT your business.

The Golden Opportunity: Collect Data From People ABOUT The Business

I am advocating taking the simple path to improving firm performance – get more information. And why can’t HR be the group that gets information ABOUT the business from the people who are doing business every single day? Why not ask your employees what’s going on out there? They are in the front line working with customers; they see processes working and not working; they know if something unethical is occurring; your employees in many cases ARE your customers. Why not supplement your talking TO employees by asking your employees to talk TO YOU?

When HR collects data ABOUT the business that is FROM employees, and then delivers that information to people who can act upon it, then HR is in the business of reducing the information asymmetry problem, and HR helps the firm maximize its performance. What happens when HR walks into a board meeting or the senior executive meeting with new insights about customers, strategy, new business opportunities, problems that need to be solved and more? Executives listen.

In fact, executives listen much more intently than they do when HR comes in with only the latest satisfaction, engagement, or culture scores. Management listens because the additional data HR is providing obtained through employee surveys is meaningful, actionable, and about something in which they care deeply. I’m not saying that data ABOUT people is not valuable. Data about satisfaction, absenteeism, turnover, and more are critical metrics, but they do not always grab the attention of executives in the same way that information about their business problems and new opportunities for growth can engage managers. Even better, when you collect data from people about the business, you quickly will find out that many things are working well. You can learn from your strengths as well as from your weaknesses.

The Key to HR Being Strategic?

We meet with a lot of HR executives who have said the following: “We just finished outsourcing much of our HR work; our employees are effectively using self service; we have all our HR data in our centralized data base, and now we’re ready to be strategic. But we don’t know what to do.” We’ve looked at their dashboards, reviewed their pages of reports, and we worry that if these HR executives are having a tough time figuring out what to do with their own HR metrics, then what do we expect managers to do with the reports they receive?

If we want to be strategic, we have to reach out to managers with data that they care about. Once we get them hooked, we can then teach them about other statistics and data. The hook just may be data about the business that you collect from your employees through employee surveys.

Challenge to HR Strategists

There is quite a bit of research demonstrating the fact that employees want their firms to succeed; they are not self-serving creatures trying to benefit themselves and not caring about the team. Employees want to contribute to something that is bigger than themselves. Unfortunately, in most cases, the company does not provide employees with simple and non-threatening modes of voice or with enough alternative ways to communicate.

As HR strategists, we are in a position to help senior executives make their companies more successful. Humans are the targets of HR, and if we utilize what we know about humans, and engage them in our businesses to share information with management, then we can be truly strategic business partners with our leadership teams.