Human Resources can be a difficult area to develop metrics and show the return on investment (ROI) however, the payroll is often one of the largest expense lines for a business, which should put HR metrics on the top of our agenda. Determining metrics and measures around your human resources can provide valuable information about your people and your processes. The more information you are able to gather, the better equipped you’ll be to improve both the resources and the HR processes involved.
The key to developing metrics that work is to make sure they are developed with the business values, mission and goals in mind. Metrics that don’t align with the business are meaningless and a waste of time. For example, if you are developing metrics around employee training, but training isn’t valued by the company, it’s not going to be a useful measure. However, if ongoing learning is a core value of the company, then this would be helpful information. The best way to make sure your metrics are aligned with the business is to take a collaborative approach and work with the executive team to determine what should be measured and how. As you set out to develop your metrics, be reasonable. Start small, maybe only measuring a piece of the HR processes to begin with. Once you’ve got your initial metrics under your belt, you’ll be able to expand to cover other areas of HR and the business. I recently read an article by Kyle Lagunas – HR Analyst at Software Advice – on Onboarding ROI. It addresses developing metrics around your new hire onboarding and orientation program. This is a great place to start as recruiting and bringing new hires into the organization can be a costly human resources function. The author makes a great point about developing metrics to measure your onboarding program and in doing so, is able to illustrate the importance of having a true Onboarding program which goes beyond just a payroll and benefits orientation.
As you develop your metrics, be specific on the measurement parameters. Will you be measuring monthly, weekly, quarterly or annually? What exactly will be measured and how will you gather the data? The more specific you can be, the more useful the data will be for the company and offer valuable information on your HR ROI.
What have you found to be the most valuable HR metrics from either a process standpoint or business?