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What should we measure?

HR leaders today face challenges in making the most of their human capital investment.  In order for organizations to be successful in today’s environment, HR will need to review and redesign professional tools and processes to be able to measure data and facts to ensure a competitive edge.  In order for Us as HR leaders are challenged today more than ever to make sound business decisions.  For us and our leadership teams to make decisions we need to have correct data and facts.    But we continue to struggle and ask “What should we measure?”

Historically we have measured areas such as cost per hire, absenteeism, benefit cost per employee and turnover rate.   While these have been important we should consider the future of our human capital investment and measure the areas that help us make decisions for today and growing into tomorrow.  The areas measured on the past do not have predicative or strategic planning value.  These items only report the past HR activities but do not provide guidance as to what can or should be done to improve the effectiveness of HR for the organization.  As HR professionals, we need to develop forward looking analytics designed to improve understanding of employee desires and engagement. These analytics are metrics that can be used to alter the HR strategy for better hiring and retention practices in the future.  Following are four metrics that an HR leader can consider for implementation and assistance with the forward facing view of human capital:

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Retention rate of employees in critical roles:  Which roles have the biggest impact on your organization’s success and which roles are the most difficult to fill?  What is the retention rate for each of these positions?  This information will allow you to see if you are spending money on repeating the recruitment of these roles.  Once you determine which roles are key and are low retention you can figure out the reasons for the turnover.  Is it the workload? Is assistance needed?  By understanding the reasons, you can develop an action plan to identify and retain good talent.

Career progression metrics:  These can be metrics to measure the average amount of time in a position before a promotion or change in job title.  Many employees site career progression as key criteria when seeking other employment positions.  Use these metrics to see how attractive your organization looks to prospective candidates.  This measurement can also be an indicator of the number of employees not being promoted or moved into other positions.   By determining the reasons, solutions can be implemented to ensure future candidates have the opportunity to advance, and may assist incumbents with mobility.

Percent of employees that support organizational change:  Employees that do not support organizational change are not likely to stay.  Each time a substantial change is implemented survey employees to see how they feel about the change.  If you find that change is not accepted within your organization this could be a reason for turnover.

Employee engagement index:  If employees are not engaged and happy they will ultimately leave an organization.  Find a way to measure engagement within your organization.  Many companies use an employee survey to measure happiness in a few areas within the organization.  By having this information goals can be developed and specifics for causes can be derived from the survey questions.

Traditional HR metrics remain useful but not predicitive for the future success of an organization as it relates to human capital and strategic decision making for HR.


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