Emerging HR Practices

Best HR Metrics

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Dr. John Sullivan

Jul 26, 2004

As a recognized expert in the area of HR metrics, I’ve had the opportunity to advise numerous large firms on what HR metrics they ought to be utilizing. Through this experience, I have observed that a good number of firms make the same two errors when it comes to developing and implementing HR metrics. Avoiding these two errors will not guarantee success by itself, but it will go a long way towards ensuring that you are set up to handle any roadblocks or problems you may encounter along the path to using world-class HR metrics in your organization. These two common errors are:

  1. Developing and implementing HR metrics in a vacuum
  2. Developing more metrics than it is feasible to maintain and utilize

The most common error that I find is that of HR managers trying to create and implement metrics in a vacuum. Instead, I recommend a collaborative approach, in which you take a list of strategic HR metrics that you can live with to the CFO and let him or her select the specific ones that are most likely to measure business impact and be easily understood and considered strategic by top management. By letting the CFO play a role in the selection process and allowing them to make the final decision on what metrics you will move forward with, you eliminate many of the roadblocks you may encounter ó and you’ll recruit a high-level champion at the same time. The second most common error that senior HR managers make in developing metrics is that they develop and track too many. A large number of metrics is both unnecessary and difficult to maintain. I recommend instead that you settle on between 8 and 12 really important HR metrics that demonstrate HR’s impact on the business. Because collecting data and calculating metrics is time-consuming and expensive, it’s important to focus your energies on the ones that really matter. My Hot List Of HR Metrics The following is a list of the 37 individual metrics in 14 different categories that I would recommend for consideration by a large organization, or even one that is not ready to do sophisticated data collection and analysis. These are not the most sophisticated metrics I can provide, but each of them is relatively easy to understand and the data needed to answer them is relatively easy to acquire. I recommend that you use this list of 37 powerful HR metrics as your initial list that you run by your CFO. Remember, before they have made their final selection, encourage them to limit the final metric count to 10 or less really strategic measures. First-Tier Metrics Overall Workforce Productivity

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