Everyone has goals – every person, every business. In corporations, these goals or standards of success are usually called metrics. Sales and marketing metrics are pretty easily defined – the number of units sold, the number of conversions on a website, the number of customers called, the percentage of overall business revenue increase.
In HR, the metrics can be a little murky. It’s harder to assess what’s being measured and why – and sometimes it’s hard to measure it at all. But without good goals and the ability to measure them, how can a company track progress and growth? That’s why HR analytics and metrics are so important. Metrics help companies define the goals and analytics give them insight into the progress towards those goals.
What are the best ways to use HR analytics and metrics?
Here’s how to get HR analytics and metrics to work for you.
1. Know the questions you want to be answered
The first step is figuring out what you want to better understand your HR efforts. What are you trying to track? What are your goals? What needs to be improved? For instance, if you are trying to measure your turnover rate, and understand if it aligns with the industry standard or needs to be improved, you need to outline what an acceptable number is. Is it 10%? Is it what other businesses in your industry report? Asking these questions can help you decide what needs to be measured and how – it can also help you dig deeper and understand the why behind certain key performance indicators. If you find out your turnover rate is high, for instance, you’ll want to know why which will give you the steps on how to potentially improve.
2. Know which metrics you want to measure
Once you have questions outlined – what is our turnover rate, is employee engagement high enough, what is the ROI on each employee, etc. – you can establish metrics that align with what you need insight on. Your questions will help you understand what you need to find a baseline on and at the same time give you a goal to work towards.
Some common types of HR metrics include:
- Absence rate
- Training expense and effectiveness
- Retention rate
Your HR team likely already has goals that you’re tracking towards, but naming them and quantifying them is the first step to improvement. Analytics in HR help human resource teams better understand problems (and their solutions) as part of the holistic view of the business instead of taking them on as isolated issues that are unrelated t the rest of the business.
3. Find out which analytics can support your data gathering
HR data analytics can be used to improve processes in a number of HR areas – and allow you to collect and analyze data for continued improvement along the way. They are also often the tools of problem-solving. For instance, if you are noticing a high turnover rate, you might work with hiring analytics to filter candidates who you think will be less likely to leave – those with longer tenures in previous positions, for instance; it might also help you identify someone already working in the company who would be better suited to a different position, which may help reduce turnover by better utilizing their skills. Once you have analytics in place, you can troubleshoot more problems, implement more solutions, and track the success of those solutions over time.
The biggest value that HR analytics and metrics can help you with is that it offers tangible data that can help you shape the overall strategy of your business in a data-oriented, people-centric way. Having analytics tools that help you better measure your metrics is the way forward in HR efforts.