As a result of increased interest in human capital, HR professionals are expected to provide qualitative information to the internal leaders, board members and stakeholders of the organization. Thus, HR must be able to align the HR strategy with the organization strategy and prove its effectiveness.

Measurement is critical to monitor and effectively manage goals as well as final outcomes. Use HR metrics to achieve goal value and buy-in from organizational leaders and to report status and outcomes. Quantitative information is a common language that all leaders understand and consider credible.

Understand organizational objectives and align HR strategy to them. Consider metrics that the chief executive officer deems important. These metrics will align with organizational strategy for increased market share, productivity, employee return on investment, labor costs and revenues. Move away from seeing the provision of metrics as a cost function and instead look at what human capital is providing to the organization through quality hires and engaged and productive employees.

Metrics are used in areas such as HR outsourcing and workforce planning. A variety of metrics can be used to analyze a goal or outcome. Cost per hire and health care costs per employee are examples of department metrics that provide valuable information.

Also, measure on a broader scale to determine the contribution that HR is making to the business, such as its impact on profitability, competitiveness and other organizational goals.

Use HR metrics for:

• Budgeting and planning purposes.
• Development of strategy.
• Benchmarking.
• Compliance.
• Assessing organizational, department and individual goals.

Don’t just provide data, but provide complete and timely data. The data should be of interest to management and other leaders. It should report the status of goals and outcomes.

Make sure to measure the appropriate factors, such as the correct time period. Also, assess the metrics currently used.

The information you are putting out should be a comprehensive analysis of the goal or outcome and be aligned with HR and organizational strategy.

Please Note: This material is provided as general information and is not a substitute for legal or other professional advice. Contact the Knowledge Center for more information.

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