Like Billy Beane in Moneyball, HR leaders are always coming up with new and better ways to measure and demonstrate the success of their talent strategies—especially as CEOs, board members, and investors have become increasingly interested in assessing the strength of a company’s culture and the quality of its people pros.
Among outside stakeholders, “we’re seeing a lot of interest in how [metrics] can be applied to HR and people management for our clients,” Traci Mabrey, general manager of Dow Jones Factiva, told HR Brew, adding that there is “certainly a big amount of return-to-the-workplace conversation and planning, and [about] how that is impacting both retention and hiring.”
After the roller-coaster ride that was the last three years, it’s no wonder top leadership is now taking a greater interest in HR—one that was previously reserved for product, finance, and revenue functions.
While some leaders may see good products as the key to success, they’re forgetting that people make those products, as Techstars CEO Maëlle Gavet told HR Brew.
“It’s about building businesses for the long term,” Gavet said. “Building the best product possible is critical, but the only way you’re going to be building the best product possible is to have the best people.”
HR leaders should think of this data like their GPA: It’s important for them and for stakeholders who use it to determine organizational health.
The foundation. Gavet recommended that HR should monitor workers’ progress through the various stages of the employee lifecycle, from recruiting and onboarding to departing. This should include measuring headcount, voluntary and involuntary turnover, and diversity data, as well as pay raises and promotions—including how many employees receive them and their demographic breakdowns—as these are key drivers of retention and inclusion.
Engagement surveys that ask employees about their relationship with their team, manager, and company mission can be used to measure cultural health. Gavet said that Techstars encourages portfolio companies to do at least one a year.
The engagement survey data helps HR set benchmarks for employee sentiment and also potentially identify attrition risks before they become a problem, Gavet said. An engagement survey’s participation rate can be a useful metric on its own, because it shows how many employees feel invested enough in the future of the company that they’re willing to take time to provide feedback. That doesn’t mean 100% participation is perfect, but if people are not willing to fill it out, there are probably some issues.
“We need to honestly be listening carefully between the lines to our employees,” Mabrey said, and “ensuring that we’re doing the things that are going to retain and activate that talent, before it becomes a potential turnover issue."
Quick-to-read HR news & insights
From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.
Engagement data, she said, can be combined with performance data to understand the ROI of talent efforts.
“The metrics of employee engagement and employee performance are really critical, not only to the company performance overall, but [to] ensuring that those employees know what their success criteria is or what their KPIs are,” said Mabrey.
The limitations. Many organizations measure the effectiveness of recruiting by looking at how long it takes them to fill a job opening. But Gavet suggested that turnover data—especially that related to employees who quit after six to 18 months—could also help identify recruiting problems. If employees are not a good fit, or are not properly onboarded, they’re not likely to stay long.
“That indicates that you have a problem in your recruiting process, very likely, that you may have a problem on your onboarding, and you potentially have an issue with your manager,” Gavet said. “So, the indicator is there to make you go deeper.”
Another key analysis can include pay equity, Denise Hemke, chief product officer at background-check provider Checkr, told HR Brew. The same challenge applies, however, of diagnosing the problem.
“The key part is not just looking at it as aggregate numbers,” she said. “It’s really looking at the why.”
Showing your work. Investors and other outside evaluators, like prospective executives, may want to know more about candidates, such as demographic breakdowns, how many apply to open positions, and how they are sourced, Gavet said. These metrics can demonstrate the strength of a company’s employment brand, as well the efficiency of its hiring process.
HR should also consider how to educate and disseminate information to leaders about the metrics that matter most. As Shannon Schuyler, PwC’s chief purpose and inclusion officer, told HR Brew last month: Data should tell a story.
Hemke agreed with that sentiment. “Functional leaders have to care about these metrics,” she said. “They have to partner with HR on those metrics to ultimately say, ‘Why are people leaving my organization? And…what steps can I make in order to improve that employee’s experience [so] I can retain people [and] they can deliver on those business outcomes that I’m aiming for?’”—AK
Do you work in HR or have information about your HR department we should know? Email [email protected] or DM @AmanfromCT on Twitter. For completely confidential conversations, ask Aman for his number on Signal.