Human resources metrics are different measurements that are used to show the value that the human resources function provides to the organization. These measurements demonstrate how effective the efforts of the human resources department are to the overall success of the organization.
Types of Human Resources Metrics
There are three types of human resources metrics:
- Metrics that measure the effectiveness of the human resources function.
- Metrics that measure the efficiency of the human resources department.
- Metrics that measure the effectiveness of the employees within the organization.
Informing Promotion and Salary Decisions
A major demotivator for many high-performing employees is watching under-performing peers receive promotions. There can be several factors that lead to this, but human bias and nepotism can often play a part. Taking a data-based approach can help organizational leaders watch the rate at which employees are receiving promotions and raises and what key factors drive these decisions.
Organizations can use analytics tools to establish employee performance benchmarks, and then coach existing and incoming employees to understand those qualities and their impact. Deloitte, along with other companies, analyzes human performance data, travel data and billing hours, to help individuals boost their professional performance as well as their wellness and energy. Organizations can even use data gathered from top-performing teams or individual employees as a means to understanding effective processes and set standard benchmarks for other groups in the organization to follow.
Understanding Attrition and Increasing Retention
Performance-based analytics can also be applied to predict which employees might be more prone to leave, while also telling a story about what factors contribute to attrition. Money may be less of a factor than the quality of managers and supervisors, according to management consulting firm McKinsey & Co.
Organizations can also glean data on their turnover rate (both voluntary and involuntary attrition divided by average headcount) to understand trends and address sudden spikes. For example, a surge in involuntary attrition may be an indication the recruiting and training process needs a review; an uptick in voluntary attrition may require deeper dives into specific departments or managers.
Examining Employee Engagement
A crucial metric for any HR department is employee engagement. This data is typically gathered via employee engagement surveys that are conducted by outsourced survey providers (i.e. Gallup). However, more organizations are seeing the benefit of bringing this in house to their HR departments for both faster results and to maintain the ownership of their employees’ data. Instead of the extensive surveys that many employees dread (and some don’t even fill out), in house HR departments can use brief, small surveys to regularly monitor engagement, and with the help of AI tools, gain immediate data insights. Another tool that is both an additional source of employee data and improved engagement is gamification.
Measuring Employee Development and Learning Outcomes
A vibrant training program can benefit organizations with a more productive workforce and improved retention. Rather than ask employees a few static questions at the completion of training, organizations can shift focus from satisfaction with the training to comprehension of the program, tracking the employee’s actual progress throughout the training. Companies can go one step further by applying predictive analytics to customize training content that better meets employee learning styles at an individual level. At an organizational level, predictive analytics can assess weak points in the training (like when employee engagement dips). Ultimately, this data can analyze patterns that make a training successful and direct companies to improve content in the right places.