I’ve found that workforce metrics is an area within HR, which whenever possible is given to a data analyst while HR practitioners stand back and admire. I sometimes think it’s like watching a fire eater, not to be tried without the pre-requisite training and supervision. Yet, HR is increasingly under pressure to prove the validity of HR through the use of HR metrics. Metrics are increasingly expected from all departments within organisations so HR isn’t an exception.
So where do you start with workforce metrics?
The first thing to do however difficult is to have data integrity, without it any reports presented always focus on the accuracy of the data and not the issues which need to be addressed.
The general metrics, which I think every organisation should measure are absence and attrition as they are directly related to cost and time. This is by no means the only measurements but a useful one to start with. To develop further measurements requires an understanding of the business’ operating model and therefore for the private sector what determines profits and for the public and third sector what their operational targets and contractual requirements are.
Developing the metrics
My recommendation is to use a base metric such as absence and further develop it by understanding the impact of absence to develop the true cost. For example, if absence is always covered by agency staff or overtime the cost is the additional cost of staffing plus the cost or time of organising staffing. Time can be a measurement or can be converted to cost based on the actual resource such as a % of a resource or an average cost per hour. Whichever metric used, needs to be consistent with other measurements.
A broader overview of absence is understanding the consequences of absence to profits or services. Can it be proven that profit has decreased or targets not reached owing to high absence? If there is a proven correlation then interventions from an HR perspective start to become more compelling.
An example of developing a workforce metric
For example, Organisation A has mixed pockets of absence across various departments and for those departments with high absence, they are either not achieving their targets or are not standout departments. HR provides reporting and knows which departments to target. At an operational level, they support proactive management of the absence and check to see if changes have been made. This may create improved attendance but perhaps there are underlying reasons for the absence. The HR department investigates what if any are the underlying reasons and there is a combination of operational reasons and some HR based reasons. Understanding the reasons enables HR to create various programs from talent management to employee engagement to performance development each of them with their own portfolio of metrics. For employee engagement, this may be that employees are increasingly happy in their roles and the organisation each time a survey is carried out. Critically, the key metric though is absence and improving attendance. Being able to prove a correlation of absence to HR programs is an example of how to manage and give purpose to HR metrics.
In my experience, HR needs to align to what the board wants to improve and express this as a single metric, which is then supported by other workforce metrics. My key interest in metrics is not the numbers but being curious about what is causing the outlying metrics.
