How long have people thought of HR as the department that hands out holidays, rolls out confusing new policy, and asks you how you’re feeling? The reality here is that HR data is quantifying HR performance in new and exciting ways.
Transparency. Accountability. Responsibility.
These three buzzwords have become synonymous with efficiency, and they’re based on a long-standing relationship with performance monitoring.
Like with most departmental teams, having key metrics that they strive to impact, and crucially having the tools in place to track these metrics, means they can map their impact on the bottom line.
Leading to improved effectiveness, better conversations with stakeholders and, most importantly, better development strategies that will improve their teams performance.
And although the benefits of performance tracking are the same for HR, the road to getting the metrics that inform HR performance is a long and winding one that’s not often travelled.
In fact, ADP has listed it as one of the hardest metrics to understand and assimilate: “There are no generally accepted standards for measuring the value of people, unlike the readily available tools for quantifying the value of tangible assets such as equipment, office furniture or accounts receivables.”
Because of this, HR professionals are often fighting an uphill battle when it comes to quantifying their output and having conversations on their activity.
But HR professionals who accurately collect and deploy data can have a tangible impact on their business. They will source better talent, reduce turnover and provide better experiences all round.
So, how do you quantify HR performance and output? We’ve brought together a few insights from HR professionals to help answer that question.
How to Quantify HR Performance
When HR improves, so too does the organisation in which it operates. But it’s so often the case that HR teams struggle to align themselves with wider business objectives in favour of sweeping policies that operate for the business, but not with it.
Opening up conversations with other departments around the business enables a ‘hive-mind’ approach to HR objectives. And when HR’s objectives are the same as sales or marketing your key indicators can be a mirror match.
This open forum was a key component of MAG-O’s HR strategy as they sought to dominate the ‘Airport Agency’ eco-sphere. But what Kelly Singleton, HR Director at MAG-O, really found helped her team be accountable for their output was the introduction of popular methodology like Agile. She told us on Venturi’s Voice:
“Everything we did from a HR perspective we did following the Agile methodology which has expected ROI at the forefront of everything.”
And it wasn’t just turnover rate and absence that was affected, it was communication across the group in general that improved as well.
“This new way of working is shifting the dial on performance at every level.”
Consider how well-defined methodologies, like Agile, can be applied to your HR team. One aspect of traditional HR work is particularly well suited to the Agile methodology: employee feedback.
Traditionally, for bigger companies that might outsource employee feedback, data would be crunched and magically appear in their inbox a few months later. This allows little time for a HR professional to react, and those who receive timely feedback on any response they give have been found to reap the benefits.
Gallup found that employees who receive regular recognition are much more likely to increase their productivity, increase team engagement, keep customers happy and stay at their jobs.
Bringing that process in house with a feedback system would close the loop, giving you more time to react and more time to consider the why. The good news here is that there are many HR tools and platforms out there that will help you do just that.
HR tools and platforms
The ever-growing and changing demands of HR teams everywhere has given rise to tools and platforms that streamline HR teams in a number of ways. One of the biggest benefits of these tools being the in-built reporting.
Here are two of the best platforms for reporting that can help quantify HR output.
Breezy HR is an end-to-end recruiting software with a lot of out-of-the-box functionality to help streamline many HR processes.
According to the Breezy HR website, Breezy HR reports on the following areas:
- Pipeline metrics, like how many applicants are in each stage of your pipeline
- Hiring funnels, to benchmark conversion rates
- Time to Fill reporting, so you can optimise your time more effectively
Bamboo HR looks at the entire lifecycle of an employee gathering vital data like workforce planning, PTO usage and employee turnover. This data is built into easy to digest reports that make for easy conversations with key decision makers and stakeholders.
These platforms are incredibly effective at streamlining and organising HR output but where they fall short is in their ability to offer insights into your teams performance and output. For those insights, HR professionals can turn to HR metric categories.
The HR metric categories you should be tracking
Overall Workforce Productivity
Following the principles laid out by Dr. John Sullivan, a renowned leader in talent management, “The very best measure of overall HR success is workforce productivity.”
For anyone outside of HR it would seem like a no-brainer to track and monitor productivity. For HR professionals, it comes down to understanding and recording how the initiatives that they undertake improve workplace productivity.
You can do this by comparing the money spent on these initiatives, including the people costs of the HR team, to revenue generated by the teams affected, looking for uplifts.
£ Invested in people costs ÷ £ revenue generated by team affected
A complete focus on productivity is not healthy. That’s widely recognised and, as such, employee engagement surveys and checks are standard in many organisations.
Specifically, you can measure the following to determine employee engagement:
- Happiness in the workplace
- How well equipped employee’s feel – do they have the tools needed to perform?
- How well they believe their manager reflects the values of the company
- How well they believe their workload is managed and maintained
Avery Kiesling, HR & Talent Manager at Ampersand Commerce, is a big advocate of the traditional anonymous survey when it comes to quantifying employee engagement and satisfaction.
She spoke to us about quantifying culture on Venturi’s Voice: “The key to quantifying engagement is asking questions.”
Look to bring in tools like Typeform or Jotform to create more engaging surveys that can skip questions depending on certain answers. This extra layer of logic will massively improve uptake and submission rates on these surveys.
Overall monetary impact of HR on your business
HR professionals won’t directly impact income, but they can still articulate the value they provide in attracting, retaining and engaging new talent.
Good metrics worth tracking here include:
- HR upkeep costs against annual revenue
- Cost per hire against annual revenue
A caveat: none of this can happen in a vacuum
Like with most developments you want to bring into a place of work, you’ll need ‘buy in’ from your team and the stakeholders around the business. HR teams are at the eye of the storm when it comes to collaboration and it’s that collaboration across the business that can take the data from numbers to insight.
“Really, cost-to-hire should be cost-to-good-hire,” says Ben Yurchak, president of KnowClick, speaking to Shrm. “One’s an operational metric, and the other’s a quality metric.”
“To determine the cost of a quality hire, you need time and information from other departments,” Yurchak notes. “Cross-functional measurement is harder to do, but it connects the dots.”
Consider using tools like Slack and Yammer to bring teams together. Team members who feel connected to a wider project and initiative are generally more productive with mission-driven workers being 54 percent more likely to stay for five or more years.
Modern HR departments are armed with data that can free them to make strategic decisions. Using these metrics as a basis for conversations with other leaders around your business is a great place to start. Note: Avery and Kelly were speaking to Venturi on the Venturi’s Voice podcast. Their excerpts have been transcribed.
About the Author
Jamie Kehoe is the Digital Content Manager at Venturi, he loves to share his thoughts and opinions about staffing, technology and content marketing.