From the Archives: HR Metrics 101

Something of a look back for President’s Day.  A we’ve been focused on tools and methods for improving the HR practice, it’s good to remember that measurements are the key to showing progress.  This post is a look at some of the basic principles of metrics.  Originally published September 20, 2010.

Metrics are critical to running your HR practice, but far too many HR practitioners haven’t been taught what they really need to know about them.  Here’s a few tips that might be helpful:

  • No one really cares about headcount.  How can you tell?  Ask a simple question.  If the headcount next week is ten fewer than last week, what will you do about it?  The answer is usually “it depends.”  And that’s the right one.  Headcount is an indicator, an important denominator for some metrics that are truly indicative of what is happening.  But alone, it’s almost meaningless.
  • No one really cares about straight turnover. What they care about is the cause of turnover, and what can be done about it.  To deal with it, you have to understand what kind of turnover  you are dealing with (Voluntary?  Involuntary?  Regrettable?  Retirees?  Internal movement?) and then you can start to find the root cause.
  • Business leaders watch trends more than numbers. Don’t’ get hung up in the minutia of reporting.  Look for trends that are playing out over weeks, or even better months, instead of day to day.  Businesses are run that way.  Your practice should be too.
  • But know the numbers, too. Nothing will sap your credibility faster than presenting a set of trends and not being able to talk about the details.  Present the important part and tell the story that needs to be told.  But be ready when they ask for more, and be able to discuss not only the details, but what they mean to the business.  That will bring your credibility up, and help you guide your partners in making better decisions for your population.
  • Learn to distinguish between correlation and causation. Sure there are more drownings when ice cream sales are at their peak.  But few people drown in ice cream, right?  Knowing the difference can help you guide a business leader to hire lifeguards, not bad butter pecan.

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