Making Human Resources a Productivity Center

A man wearing a dark business suit leans over a table to reach a tablet as the early morning sun shines through the window behind him.

Measuring success in the field of human resources can be a challenge—many elements are tricky and confidentiality can be a concern. Still, HR can be an efficient productivity center for any organization, providing it can produce metrics that support the business and its plan for future success. Below you’ll find an overview of the key strategic metrics associated with human resources, and how they can be effectively implemented to unleash positive feedback about HR’s contribution to the bottom line.

If you need help building effective measures for your team, then give us a call at 502.753.0970 or contact us on our website here.

What are HR Metrics?

Simply put, HR metrics are a means for tracking the effectiveness of HR. Metrics are typically measured through an assignment of monetary value to HR programs, enabling management to gauge success in terms of dollars and performance. Successfully tracking HR metrics isn’t always straight forward. Common challenges include difficulty extracting the data from multiple systems or departments, inaccurate record keeping, or a lack of clear purpose for measuring performance.

Quite often, HR professionals find themselves so consumed with addressing the day-to-day needs of their organization that tracking data gets put on the back burner. However, measuring data is crucial for understanding performance and targeting improvement, ultimately showing how HR contributes to the business strategy and success.

What Metrics Should You Measure?

A basic rule of thumb to keep in mind when you develop metrics for your organization is to measure results, not tasks. The results you want to measure should be geared toward your organization’s business strategy goals and should encourage improvements so better HR and business decisions can be made in the future.

Below you’ll find a brief summary of data you can measure in four key areas of HR: administrative, employee relations, leadership, and strategy. Hopefully, this list will give you a starting point for measuring data in your organization.

Administrative Metrics

Compensation

  • Payroll percentage of total operating costs
  • Compensation targets benchmarked against competitors
  • Turnover rates

Benefits

  • Costs per participant
  • 401K participation rate

Compliance

  • Number of new and closed EEO charges
  • Progress on Affirmative Action goals
  • Inspections and audit outcomes
  • FLSA compliance (overtime and compensation)
  • Employee Handbook updates
  • I-9 form compliance (immigration can be costly!)
  • Programs to improve HR compliance

Employee Relations

Employee Relations

  • Productivity per employee
  • Employee satisfaction survey scores
  • Employee performance evaluation scores
  • New hire onboarding satisfaction and retention
  • Turnover analysis

Safety and Workers’ Compensation

  • Number of incidents
  • Number of employees trained
  • Certifications completed
  • Money saved in safety improvements
  • Safety and quality measures

Diversity & Respectful Workplace

  • Survey perceived fairness
  • Number of people trained
  • Survey perceived tolerance
  • Trainings conducted
  • Incidents reported

Leadership

Staffing

  • Number of positions to fill
  • Quality of hires
  • Retention of hires

Performance Management

  • Timeliness and quality of performance reviews
  • Performance evaluation scores
  • Number of positions with written accountabilities/results of accountabilities

Training

  • Number of programs
  • Impact and effectiveness of training
  • Return on training investment

Strategy

  • Quality of succession planning
  • Employee satisfaction data
  • Standing on the state’s Best Places to Work program
  • Annual HR strategic plan to support the business plan

Putting Data To Work

Once you’ve gathered the data you think is most relevant to your organization, it’s time to put it to work creating meaningful measures.

First, determine which areas would be most helpful to focus on so you can create metrics that will be most useful for your current goals.

Next, select benchmarks to compare your organization’s data to. Determine organizational type, product/services, size, and structure.

Finally, compare your organization to the benchmarks you’ve developed and determine how desirable your results are in relation to the business’s goals.

After you’ve put in all this hard work, the final step is to communicate the data to your team so you can be an instrument of positive change in your organization. Remember to keep it simple so others can remember and explain the results you’ve found!

Measuring Your Success

Developing HR metrics can seem overwhelming, especially if you’re doing it on your own. But the key is to success isn’t that complicated – you just need to get started! The data you collect will ultimately help you to show your team how HR contributes to the bottom line and will help you to justify your HR initiatives. Implement strategic HR metrics in your organization to start measuring your success today!

Still unconvinced? If you need help building effective measures for your team, or if you’d just feel more comfortable talking to an expert, then give us a call at 502.753.0970 or contact us on our website here.