By Scott Thomson, Chief Operating Officer, Links International
It’s great to speak with clients and learn that most HR functions in Asia are now determined to transform themselves from administrative functions to business partners. Being recognised as a valuable HR business partner is driven massively by your perceived credibility and ability to help business leaders make better business decisions. Given how data-driven most senior leaders now are, it’s critical that any HR Business Partner brings data that supports their opinion or recommendation. In order to do this, it’s essential to have good HR reporting or HR analytics.
“In god we trust; all others must bring data.” William Edwards Deming
Where can you obtain supporting data for your HR metrics? The good news is that most HR functions have the data they need to be great business partners sitting in their HRIS or HCM.
Here is our list of the top 5 people metrics that you need to be measuring in your HR analytics to understand your workforce and be an effective HR business partner:
Sales Revenue (performance rating) by tenure
This is an essential HR metric for any company with a salesforce and it’s so easy to generate that it’s a tragedy for HR not to provide it! Simply put, this metric asks “How much does the length of someone’s employment impact the sales revenue they generate?” It is incredibly hard to be a credible HR business partner to your sales team if you don’t track this metric.
- Average employee sales revenue vs. number of years of employment
The minimum HR information you need is only a start date and a sales report from your sales team’s CRM. Virtually all HR functions have access to this information and it is a hugely beneficial and simple HR metric that you can provide to your sales leaders. Cutting this data by team or office location is also hugely beneficial for a sales leader trying to identify what parts of their team need the most attention.
Sales Revenue (performance rating) by hiring source
Most HR teams track hiring cost by hiring source for their own benefit and budgeting purposes. However, pairing this HR metric with sales revenue or performance rating data again contributes hugely to your credibility when working as an HR business partner with your Head of Sales or Sales Leads.
- Average employee sales revenue or Performance Rating vs. hiring source of employee
If you are not already tracking the employees’ hiring source, it can be as simple as adding an extra dropdown box to your HRIS or HCS when you onboard the employee, to enable you to track this key HR metric. Ensuring that sales leaders have an accurate understanding of where they find and hire their most successful employees is game changing information for sales leaders who are increasing their salesforce. Employee turnover rate
This is an oldie but a goodie! Employee turnover rate is an essential HR Metric that all good HR business partners will share with the business units with which they partner. This is a very easy HR metric to pull, as all the information is in HR systems. However, there is always a surprising number of HR teams who can’t track employee turnover because they are unable to accurately track headcount.
- Number of off-boarding employees vs. average number of employees
While most business leaders will have a gut feel for their turnover rate and the impact it has on the ability of their teams to achieve business outcomes, providing the exact level of turnover and comparing employee turnover rate quarter on quarter, or year on year, is a great way for HR business partners to enable business leaders. Having a clear understanding of staff turnover helps business leaders to make good decisions about how able they are to achieve business outcomes with current staff attrition (e.g. how much staff attrition will impact their revenue forecast) and whether they have a problem with staff attrition (e.g. do we need to undertake initiatives to improve retention through development, training, employee engagement etc.?).
Average time to fill by team
This is another very common HR metric to have HR Analytics or Reporting on and a great way to be recognised as a key business partner to the functions in the business that you are helping.
- Number of days from hire request to accepted offer
Time to fill is a critical metric for HR to track internally and provide to business partners – it is great for managing business partner expectations, workforce planning and identifying areas in the recruitment process for improvement. A high time to fill day count can be driven by a number of factors, for example:
- Your job advertising isn’t effective
- You’re not sourcing candidates fast enough
- Your hiring manager or business partner is too slow to give feedback
Providing business units with this critical HR metric is hugely useful for helping them plan their workforce and hiring requirements.
Average time to first sale
This is another key sales team HR metric to include in your HR Analytics and one that can be driven off data as simple as the start date in your HRIS or HCS.
- Number of days from start date to employee’s first sale
Time to first sale is a great HR metric that provides awesome insight into how well your onboarding process, training and team leaders are at getting their new joiners up to speed fast. Engaging your sales leaders and providing them with this information enables your sales leaders to identify areas for improvement and is hugely useful for an HR team looking to provide support for their training, engagement and onboarding initiatives.
Implementing HR Analytics in your team
The key challenges we see in most HR teams when implementing HR analytics are ensuring that they have an analytics skillset in their team and what HR metrics they want to include in their HR analytics. Here’s our advice for first time adopters of HR Analytics:
- Ensuring you have an analytics skillset and analytics tool
While you can go through the process of recruiting an analytics skillset and purchasing an HR Analytics tool, a great alternative for HR teams adopting HR Analytics for the first time is to outsource their HR Analytics and use HR Analytics as a Service. Using HR Analytics as a Service is an incredibly quick way to put HR Analytics in place compared to hiring your own skill set and purchasing HR Analytics software. Most importantly, HR Analytics as a Service provides you with flexibility. A typical HR Analytics as a Service contract will only be a short-term commitment of 12 months compared to the 3+ year payback required to justify the lengthy implementation and costly purchase of a system.
- What HR metrics should I include in my HR Analytics
Our advice here is to talk to the business leaders you are partnering with and find out what their business challenges are and what they would love to know about their teams. Once you’ve identified the relevant HR metrics, start small! The key to institutionalising HR Analytics is to start by feeding your business partners with small, bite-sized HR Analytics so that it’s manageable. For example, if you start with your Head of Sales, begin with sales vs. employee tenure and see what feedback you get. Once you find the HR metrics that matter, you can start cutting the data into teams, time periods etc.
If you haven’t started providing the business units that you partner with some HR Analytics that matter, you are always going to battle for credibility and recognition in your business. Leveraging your data to help your leaders make better business decisions is the key to effective HR transformation.
Contact us to find out more about HR Analytics, including outsourcing your HR Analytics and using HR Analytics as a Service.