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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.
Guide your company’s strategic planning and support business growth. Follow these six HR steps to obtain meaningful HR metrics and actionable insights.
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.
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.
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.
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.
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.
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.
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.
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.
Use this checklist to make sure you’ve covered each of the six steps to adopt a strategic approach to HR measurement.
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:
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