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How Data Measures The Value of The HR Function

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Strategic HR Measurement Six Steps to Get You Started

The attention and respect of the organisation for the HR team depends on measurable metrics. HR leaders need to demonstrate value to gain a place at the boardroom table. 

For too long, the HR department has been considered a cost centre. Today’s technologies provide new ways of working making it easier than ever to interpret and report on HR metrics. There’s now no reason why the HR function can’t be seen as a valued strategic business partner. 

The challenge of introducing measurement lies in knowing where to start. It is essential for HR professionals to understand what data to prioritise and how to present the findings.

Graphic with text that says 55% of companies say they still need help with basic people analytics. Source: LinkedIn.

Guide your company’s strategic planning and support business growth. Follow these six HR steps to obtain meaningful HR metrics and actionable insights.  

  1. Know your data
  2. Consult others 
  3. Understand business goals 
  4. Evaluate current approaches to measurement & reporting 
  5. Prioritise data 
  6. Embrace technology

Step One: Know Your HR Data

What data do you have access to? Get to know the data you have access to and understand what it reveals. Check for patterns, this data could come from financial performance reports or your HR data analytics.

Over the last few years, for example, has turnover been stable, increasing or decreasing?

Consider other measurements, sources, or tools that could help you understand shifts. 

In the case of turnover, there are different reasons for the result. It could be market or industry trends that impact management satisfaction, uncompetitive wages, or any number of other influences.

“With intelligent, data-driven people management, the top priority is to add value to the organisation in the smartest way possible, using all the tools at the HR team’s disposal: data, sensors, analytics, machine learning, artificial intelligence, and more.“ — Bernard Marr, internationally best-selling author, and strategic business and technology advisor.

Step Two: Consult Others

Who are your “measurement and analytics allies”? Call on other departments for their insights and advice. 

Finance and marketing teams, for example, will be able to offer valuable guidance in both data handling and digital HR transformation.  

  • Take stock of how these business units make decisions.  
  • Observe what processes they’ve streamlined to improve efficiencies.  
  • Ask about the data measurements they use, why and how often they look at their metrics. 

When it comes to selecting digital tools, the volume of HR solutions can be confusing. Work with your organisation’s IT team for guidance. 

The key stakeholders, partners and third-party vendors are another resource to consider turning to help make sense of HR data. 

All of this consultation will benefit you when you need support for new and improved approaches to HR measurement. This is particularly true if investment in tools is required to do the job well.

Step Three: Understand Business Goals

How could your data support decision-making for business growth? Aligning people-oriented data with business goals is a fundamental step in effective HR. 

What are your company’s short and long-term goals? The measurements HR tracks should feed into these directives. 

HR leaders need to ask if the kind of information presented at the boardroom table is making an impact.

Data that illustrates what HR does is a starting point. What really matters is the analytics of the HR’s impact on business success. What HR adds to the organisation is relevant for measurement.

Know where your organisation is headed and steer your metrics in a direction that will bolster and support that route.

Step Four: Evaluate Current Approaches to Measurement & Reporting

Are there any information gaps? Review the data points that you are recording. Ensure the way you are reporting is doing enough to demonstrate the impact of the HR function. Are there any gaps between what you are sharing and what the business needs to know? 

Discern what other metrics would be beneficial and use these insights to work out how you should be presenting the data. Define the data metrics that you are currently missing.

This is when HR professionals could recommend new metrics that matter in today’s working environment. If employee evaluation tools are now important a new source of HR data could be added. 

New metrics  could be added and old metrics could be removed if they are no longer relevant.  Examples: Number of termination lawsuits, employee engagement rates or success of social media channels. 

“In the era of big data and analytics, companies are turning their data into insights, such as predicting when employees will leave, where to recruit the most suitable candidates from, how to identify and attract those suitable candidates, and how to keep them happy once they become employees.” — Bernard Marr, internationally best-selling author and strategic business and technology advisor.

Step Five: Prioritise Data

How can you filter the mountains of data you have, to measure what matters? 

Once you understand what’s adding value and where the gaps are you should be able to define priorities.  This information or lack of insights will position HR managers to take a critical look at existing data and the metrics. Focus on the further Human Resources value to define priorities.

  • Define the problem or opportunity you are looking to address, and the data needed to build a solid business case.  
  • Prioritise metrics that demonstrate HR’s achievements and contributions to the organisation. 

People strategies aren’t just HR strategies, they’re business strategies. It’s a matter of collecting the right measurements to validate HR recommendations and actions.

There are many metrics that can be collected. It is ideal to choose the most relevant. Some examples are: Time to hire, attrition rates, engagement survey metrics, average cost per hire.

Step Six: Embrace Technology

What do you want to achieve with HR technology? 

Technology is changing the way we work. The whole world of tech-driven people analytics is able to collect measurements, crunch data and measure impact quickly and effectively. But where do you start when there are so many options? 

Begin by defining what you are looking for in HR technology solutions. Identify the data that you need to gather, securely store, analyse and report. These metrics should be  the measurements that matter to you and the organisation. 

One of the most powerful things HR can do is transition to technology solutions. HR tech can recast the function as a predictive, strategic business voice, with the measurements to back it up. Find the platforms to do that for you.

Your HR Measurement Checklist

 Use this checklist to make sure you’ve covered each of the six steps to adopt a strategic approach to HR measurement. 

  1. Know your data: What data are you already collecting? What other data would be beneficial?
  2. Consult others: Who are your “go-to” people for guidance and support? Have you established a working rapport?
  3. Understand business goals: What is your organisation’s strategic focus over the short and long term? How could your data align with these?
  4. Evaluate current approaches to measurement and reporting: What are you currently doing to measure and report on the HR function? Is this right and/or enough?
  5. Prioritise data: What problems or opportunities is HR looking to address? What measurements do you need to build a solid business case? What are the insights that you need to reinforce the value HR initiatives bring to your organisation?
  6. Embrace technology: What HR processes/procedures should you be automating? How would these technologies work with and enhance your current workflows?

Graphic: HR measurement checklist

Things that you can do to stay updated with data analytics topics

The data analytics topic is evolving fast. Staying updated is crucial for HR professionals. Here are some practical tips to learn more about metrics and measurements for the human resources function:

  • Keep abreast of domestic and international business news. 
  • Subscribe to industry-related trade media. 
  • Acquaint yourself with evolving technology and HR data tools. 
  • Follow the companies offering expertise in the areas you want to understand better. 
  • Register for relevant webinars, attend conferences and become an active member of your local HR community. 
  • Read the latest and greatest books and case studies from respected HR authorities. 
  • Solicit employee feedback through annual or biannual engagement surveys. 
  • Obtain in-the-moment business insights through frequent employee pulse surveys. 

With Xref, clients make smarter, more confident hiring decisions. Xref helps HR and recruitment professionals across the globe make smarter and faster hires. Through our innovative, automated reference checking platform, our customers collect 60% more feedback from references.  Our insightful analytics and the ability to detect referencing fraud gives our customers more confidence in the recruitment decisions they make. To learn how Xref works, send us an enquiry at Xref.com.

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