People Metrics: The HR Wake Up Call

The pandemic has forced the Human Resources function into the spotlight, acknowledging that they are the key to the survival of culture and optimization of your employees.

“COVID-19 has been rocket-fuel for stagnant HR departments.”

I did not coin this phrase, but it certainly strikes a nerve as I reflect on the last nine months and think about all that my clients and companies like yours have faced. How did your HR department help to lead you and your organization’s leadership through 2020?

The Importance of People Metrics

As an experienced leader, you often trust your instincts when deciding to make certain business decisions, and then you use some type of metrics to back up those decisions – reviewing increasing or declining sales, determining customer loyalty, understanding which SKU’s are flying off the shelves and producing the best revenue for your business, etc. How often are you talking to your HR leader to review people metrics? Hopefully, this is not a new concept to you.   

Why should you take the time to review people metrics? For one, this is an unbiased way of breaking down the value and productivity of your employees and thus where opportunity exists to further drive the success of the company. Secondly, metrics allow you to maximize productivity, minimize costs, and understand employee sentiments. Lastly, people metrics are not just a report card for the functionality of the HR department. While that is captured, people metrics are much more than that.  

Mark Bressi deserves credit for the insightful phrase mentioned above. I have known Mark for many years and recently had the pleasure of attending a webinar for the Paylocity HRIS system. 

Paylocity, like many other HRIS systems, is a full spectrum HR system offering – employee database, payroll, benefits, time off accrual and tracking, recruiting, talent development, benefits portal to name a few. Paylocity also offers interesting insights into data analysis.

“People data and employee analytics can dramatically improve the way organizations identify, attract, develop, and retain top talent in the market.  When allowing managers, supervisors, and executives to easily access meaningful data about their employees, it can lead to incredible increases and improvements in retention, engagement, productivity, and overall business results”, Bressi said.  

What are some examples of people metrics?

• Optimizing headcount budgets;
• Analyzing lost productivity costs;
• Determining potential employee flight risks;
• Culture/employee feedback surveys;
• Costs of time-off accrual plans;
• Departmental productivity, absenteeism, and employee engagement;
• Cost and days to hire;
• Identifying the most effective recruiting outlets for your business.

There Are Many Ways to Optimize People Data

We worked with a few clients during the pandemic to review many different types of people metrics.   

• Some businesses had an immediate need to triage declining revenues and right-sizing the costs. Productivity measures helped provide helpful information for this decision making.
• Other clients were lucky enough to stay fully operational. We used metrics to look at compensation data and time-off accruals to see if there was room to offer additional incentives for employee retention.
• Other clients were partially opening their doors months after the pandemic began.  Employee surveys were used to determine sentiment around safety at work and protocols needed to ensure those employees stayed safe.

These are just a few acute ways metrics can be used.  

Bressi, who has twenty-five years of experience in the HRIS space, also says “Business results improve when key data and employee performance indicators are directly tied to an organization’s mission, vision, and core values. In addition to potentially predicting your future high-performers, Leaders, or flight-risks…analytics can provide a clear picture (and path) to a diverse and inclusive workforce, that is equally and fairly paid, and is effectively trained to perform to their highest potential, delivering strong and consistent business results for their employer.”

Your organization should have a robust HRIS/Data system such as Paylocity from which your HR leader can pull this type of data. I would also strongly suggest that a regularly scheduled, rigorous process to review the people metrics most important to your organization is crucial, at all levels. The CHRO should review with the CEO and Executive Team, HR Business Partners should be reviewing with their line-of-business partner Leaders and his/her direct reports, and the VP of HR should be reviewing with the internal HR team. Your entire organization should know these metrics as well as they know your achievement to sales targets or customer satisfaction data.   

Hiring an HR consultant who can give you an honest and unbiased breakdown from an outside, professional perspective could be very beneficial. unHR has over twenty-five years of experience creating value-added HR processes and teams for organizations of all sizes. Call us for HR help!