This prediction is in line with findings from our recent survey. We found that 82% of executives agreed that HR metrics are valuable for their organization – and nearly one-third want to see HR teams provide more frequent reports.
This guide will help you understand the basics of HR metrics and 29 essential ones that you can start measuring immediately.
Are you looking for a better way to analyze HR metrics than before? BambooHR can help. Our analytics software allows you to manage and report sensitive data quickly. No technical knowledge is required to create a secure, organized database and export data-driven reports. The study found that executives and HR professionals agree that measuring HR impact and effectiveness on an organization is critical.
HR metrics have become necessary for any HR department to develop a data-driven, solid management strategy.
Select HR KPIs that align with your strategy.
In our survey, over two-thirds said measuring HR initiatives’ impact was crucial. In Peter Drucker’s words, “What gets measured gets better.”
Taken further, 87% of respondents stated that HR reports impact their organization’s strategic direction.
HR metrics are a crucial part of the puzzle if your organization wants to make strategic decisions for the future.
Ask the Executives what they need to see in HR reports
Although HR professionals know the importance and value of HR metrics, they don’t provide as much information to their executive teams as they would like.
Nearly one-third of the non-HR executives surveyed said their HR team does not report enough. And 16% had no idea about how often their team reports.
There are many areas where organizations can improve. Understanding and meeting the reporting needs of your executive team can help you become a strategic force within your organization.
Your reporting strategy depends on many factors, including the size of your organization, its priorities, the HR team, and other aspects. Working with your executive team is essential to determine which HR metrics are important now and what will become important soon.
HR KPIs around employee experience and retention are essential
We asked respondents what reports they used to measure HR impact and which types they wished were available. Nearly a quarter of respondents chose employee satisfaction and 20% employee engagement as reports they would like to see.
Employee experience is essential to HR measurement because HR exists to serve people. Are HR initiatives boosting employee engagement and satisfaction? Are HR initiatives helping to increase employee satisfaction and engagement? HR metrics can answer these questions.
What are HR analytics tools?
HR analytics tools turn complex data into easy-to-read reports.
For example, BambooHR’s analytics and people data tools streamline the reporting process by allowing you to collect data and generate a report at the touch of a button.
It can save HR departments days or even hours. Automated reports allow you to easily and quickly prepare for meetings. You can also stay on top of HR performance and set clear goals to help the company grow.
How to use data in HR
The Society of Human Resource Management recommends these four best practices to make HR metrics have an impact.
Analyze and conclude your data. Don’t fall into the trap of measuring to measure. According to SHRM, it is not the metrics that produce value but the insights.
HR metrics can help your organization to make better and more informed decisions. It may be necessary to change your reporting strategy if you are reporting data that doesn’t contribute to more significant decisions. The report says, “Any metric which does not result in action is not worthwhile.”
Determine the audience that each HR metric is intended for. Not all figures are equally valuable for every team. Some metrics like the new-hire turnover or time to hire will benefit your recruiting team but may not be relevant for your middle managers. SHRM says that to make HR metrics valuable, “[d]o not waste anyone’s precious time with metrics and analytics that aren’t relevant to their decisions or responsibilities.”
What companies use HR analytics?
HR analytics tools provide companies of any size with insight into their hiring, retention, and operations. They also simplify more complex HR data to create reports and information that is easy to understand and can be used by executives for company goals. These tools are suitable for companies of all sizes and industries.
Google, for example, uses HR analytics to measure the productivity and effectiveness of departments.
Retailers like Walmart use them to assess the implementation of new programs in their stores and identify new career opportunities for employees.
Microsoft and other tech firms use analytics to improve retention and identify areas in their organization that struggle to attract the talent they need to continue growing.
What tools you need depends on how your company works and what information your departments want to collect.
Director of People and Culture, International Scholarship and Tuition Services (ISTS)
BambooHR’s performance management reports help Jennifer Fisher save time, identify areas for improvement and increase engagement. These reports allow her to “better understand where everyone is.” We are more productive if everyone is moving in the same direction. “If everyone meets their goals, then our company will most likely meet its goals.”
Jennifer and her team identified potential development opportunities by tracking HR metrics, such as employee performance and engagement. These data have allowed them to help employees improve and get the right people in line for leadership positions.
Jessica Neal | HR General Manager, American Cedar & Millwork
Jessica Neal’s time tracking reports keep managers and employees on the same page about scheduling and overtime. This is important, especially for a company with offices in multiple states. She says, “Previously, if managers wanted overtime reporting, I would have to access the report in our system manually. I couldn’t grant them full access without giving them the ability to access everything. “Now I can give them reports for their employees.”
American Cedar & Millwork saw a 25-30% reduction in overtime hours due to more accurate clocking-in/clocking-out tracking.
Director of HR, New Moms
In addition to her human resource management duties, Emily White assists the nonprofit organization with securing grants and funding. With the help of HR metrics and analytics, Emily White can convince her company that they deserve the funding. For example, when our grant writer asked me for the company’s turnover rate, I could provide the number and a narrative about how the rate had decreased four times over the last three years.
Emily’s presentation of key HR metrics and the narrative and context that accompanied them helped her organization to win a grant. This allowed it to continue funding its mission.