HR analytics and metrics

9/12/13


In the new global marketplace marked by constant change, organizations must develop effective human capital practices aimed at attracting and retaining the best talents to promote innovation. They rely on HR as a strategic business partner; one who understands the dynamics of business, who's knowledgeable about finance, sales, marketing, etc...; one who is able to express the value of HR practices such as talent retention actions, training activities, recruitment, etc... through effective measurements, facts and numbers, because, "without data, HR professionals cannot credibly participate in strategic discussions" (SHRM, 2002, p.12). As a business partner, HR should be able to use these metrics to demonstrate how HR strategies impact organizational performance metrics such as revenue growth, profit margin, customer loyalty, or the bottom line (SHRM, 2002, p.11).

The increased demand for reliable HR metrics in human capital planning and business planning leads to HR's having to rely on a wide range of  accepted analytic methods, where the economic condition of an organization would dictate which model to choose (SHRM, 2011, pp. 7-8). One of the challenges of using HR analytics is that HR professionals must have the global skills to make sure that the method used is relevant to the culture in which business is conducted as, "globalization is driving more impetus toward the use of metrics with greater cultural sensitivity" (SHRM, 2011, p.7). Another challenge is to ensure that the selected (analytic) method is aligned with current and planned business context.

For example, if I were assigned to hire new talents to support business expansion in Fund Accounting at my current employer, following are some of the questions I would need to clarify with leadership before investing in any recruiting activity. What is the size of the new business in comparison to existing business? What is the value of existing talents? What is the rate of client satisfaction with existing talents? What is the current culture in Fund Accounting? How dedicated are existing employees? How much resource is the division able to or willing to allocate to the training of the new hires? What is the acceptable learning curve for the new hires? Is there any other change activity happening in the division? If yes, how will the two events be integrated and how will the new hires fit in the integration?... Based on the answers to these and other relevant questions, I would search for the appropriate technology and develop the communication system to gather the necessary data and perform analyses. Then, I could develop the strategies to target the right talents for the division; the ones that would drive performance and improve the bottom line.

An SHRM article published in 2002 correctly identified talent management as the "primary workplace challenge in the next decade". To address the challenge, HR would be required to compete for talent by creating the best practices to attract, motivate and retain employees. It would also have to learn to manage diversity in the workplace.

In another SHRM article from 2011, HR is facing the talent management challenge; but in doing so, it faces the increased demand by organizations for such metrics as recruiting, training, retention, turnover... It is required to evaluate the impact of HR practices on the bottom line.


References:

SHRM, (2002, March 6). The future of the HR profession. Retrieved from 
http://www.shrm.org/about/pressroom/documents/future_of_hr.pdf
SHRM, (2011, June 22). The top trends for 2012 according to SHRM’s HR subject matter expert panels. Retrieved from
http://www.shrm.org/Research/FutureWorkplaceTrends/Documents/11-0622%20Workplace%20panel_trends_symp%20v4.pdf