Getting the right measure of HR

Written by Cornerstone OnDemand on 23 December 2014 in Press Zone
Press Zone

In today’s chaotic business world, organisations are continually trying to determine what they need to measure in order to effectively manage their business. 

There can be a misconception that Human Resources (HR) is ‘just’ another administrative function of a business that needs to be done and doesn’t warrant its own metrics  – training needs to be completed and reviews carried out to tick a box.

However, the reality is that HR plays a crucial role in an organisation’s culture, performance and ultimately its success and therefore measuring the performance of its core employees is crucial to businesses overall success.

It’s important that clear metrics are implemented at the start to ensure that when the time comes to review business success or carry out individual reviews, there is a clear benchmark to measure against. After all, how can you measure if you don’t have something to measure against?

Money talks, measurement matters

There are multiple reasons to create, track and analyse HR metrics such as recruitment costs, staff turnover and training effectiveness as this will identify any trends in talent management and ensure appropriate action can be taken or planned. For example, if a business is experiencing a decline in productivity and employee churn isn’t being measured, this could explain the decline and help with part of the plan of actions to address the issue.

Metrics also help evaluate how effective HR spend is. For example, training budgets have been put under increasing pressure and therefore it’s important to see that businesses and their employees are getting the value and benefits for the investment. By measuring the effectiveness of training, the business will be able to see whether the training plan reflects predicted volumes or business demand.

Clear metrics also make is easier to identify and reward excellence within an organisation, which can feed into employee performance reviews and help drive employee engagement. This is because organisations can see speed and volume of promotion, for example, and are able to ensure that the people that are achieving are nurtured and factored into the businesses succession planning. 

It’s also important to remember that numbers tell a very powerful story, which can’t be ignored and can be key tool when communicating with senior management. They act as a strong benchmark, whether it is to help identify the strengths or weaknesses of the business or help prioritise key activities, such as training. By using metrics to support HR, a clear plan of action can be made.

Building measurement momentum

Ultimately if a business isn’t producing HR metrics, how can it see what initiatives have worked well and what needs to be improved? It’s important to remember that there are performance management tools out there that can make the whole process of managing HR metrics a lot easier and allow them to use this insight to ensure that they are attracting, retaining and developing the right talent.

By using technology to create an automated, ongoing, metric-based process, it can transform a business and its workforce, and arm them with the insight needed to make smart decisions regarding HR issues, employee engagement and productivity to support the business. It can also represent a serious competitive advantage for forward-thinking organisations, as it has the potential to make them an employer of choice.

To read more on metrics, download our paper on the ROI of talent management.

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