Is it time to take control of your company's crucial HR metrics – and stop relying on gut feelings and guesswork? Feeling perplexed about diving into a jungle of various measures, terms, and calculations? Or perhaps you are pondering how to elevate your work with metrics to the next level? We offer seven tips to guide you on your way! Trust your instincts or facts? How does your company assess its operations and personnel, identify undesirable trends, and take appropriate actions at the right time? Key metrics are effective for HR and personnel managers when measuring and analyzing the company's performance, achieving goals, and finding the right direction. With concrete numbers to rely on, you’ll have a perfect foundation for making well-founded decisions for the benefit of your employees and the business – whether addressing high turnover rates or analyzing patterns and correlations in absenteeism. But how should you approach the work with HR metrics to make a real impact? Where do you start? How do you choose the right metrics for your company's needs? And how do you package and communicate them effectively? Let's delve into these questions below!
Seven Tips for Success with Your HR Metrics
Measure right – not just a lot, contextualize the numbers, visualize, and act. These are some guiding principles when discussing success factors in working with your company's HR metrics.
- Make Sure You Measure the Right Things The volumes of data surrounding us seem to only grow and grow, and today, there are better opportunities than ever to obtain precisely the figures about your personnel and company that you desire. As this happens, the demands on management and HR to navigate the jungle of measures, metrics, indexes, and calculation models also increase. It's easy to feel overwhelmed when practically everything seems measurable. The key to success with your HR metrics is to focus on the most relevant and impactful measures for your operations. Measure right rather than measure a lot, plain and simple. A good starting point is to begin with the company's overarching goals and strategies. What areas can we pinpoint as particularly crucial for the company's success? What success factors related to personnel can we identify? What risks, challenges, and areas for improvement do we foresee – both today and in the future? Let the answers to these questions guide the selection of HR metrics, and then ensure to anchor the purpose of each of the metrics you choose to focus on – and you'll have a solid foundation for success.
- Work in Teams Developing relevant metrics for your operations should be done with great care. Therefore, it's wise to collaborate as a team. Besides the management, who bear the ultimate responsibility for steering the company in the desired direction, it's good to involve department heads and HR, who often can share more practical knowledge and experiences from everyday work regarding which specific events, activities, and behaviors you should shine the spotlight on. Working as a team is also a great way to increase engagement and accountability for the ongoing work with your HR metrics. Last but not least, clarify to each other that metrics are an area that requires long-term effort and that you will need to evaluate and reconsider your measures over time to ensure they remain current and relevant.
- Set Goals A metric on its own doesn't say much. Only when we contextualize it with something else does it become truly meaningful. Set goals for critical metrics like turnover rates and absenteeism to make the metrics relevant and enable you to track current values versus desired values. Where are we now, and where do we want to be?
Start with a Few Simple Metrics.
- Make Sure You Count in the Same Way How is a measure like turnover rate defined? Do we mean the same thing and count in the same way? Establishing clear definitions for your HR metrics and sticking to them is essential for making comparisons and follow-ups over time. Many also recommend starting with a few easily understandable metrics and gradually adding more complex ones over time. If you set too detailed metrics initially, there's a risk that the work will feel overwhelming, and you'll lose sight of the big picture.
- Make Comparisons and Break Down Your Data Is a turnover rate of 12 percent good or bad? As mentioned, without context, your HR metrics are pretty meaningless. In addition to comparing them to your goals, you must also look at how the trends look forward and backward in time. So make sure to think long-term and study the numbers over an extended period. Also, consider whether you can make your HR metrics more impactful by: - combining several parameters and thereby discovering patterns and correlations. For example, how is turnover distributed among different reasons for leaving? - breaking down the numbers into smaller units, such as departments and categories of personnel. How does absenteeism in department A compare to department B, for example? - where possible, making comparisons outside of your own operations. For example, what's a "normal" turnover rate in your industry, and how do you compare to that? (Just make sure you use the same measure of turnover to get an accurate picture).
- Analyze and Act First: Measure and compare. Then: Analyze and act. A strategic approach to your company's HR metrics is based on asking how things look and why they look the way they do – and then acting on those insights. Suppose you have concrete figures on a critical metric like absenteeism and analyze the reasons behind the outcome. In that case, you’ll have good conditions for taking concrete and targeted measures to reduce it. Summarize what you've found in an action plan where you document what needs to be done, by whom, and when.
- Visualize and Communicate Perhaps you know which HR metrics you want to track but struggle with inefficient tools to package and present them? A common source of problems is that the data is scattered across multiple places – in several personnel systems that aren't synced with each other or perhaps even in different spreadsheets. The result: many hours of work with complicated transfers, manual entries, and the production of various reports that need to be emailed back and forth among those involved.Fortunately, there are modern digital tools out there that make the work with your HR metrics much smoother. The solution is called a dashboard – a digital instrument panel that packages up-to-date HR metrics in a visual, understandable, and engaging way for those who need access to them, all in a few quick clicks.Sounds good, doesn't it? Here, we've compiled the top five benefits your company can enjoy with our dashboard as part of our HRM system Flex HRM: - Seamless flow where all data already exists in the system, in one and the same interface. Goodbye complicated transfers and cutting and pasting in spreadsheets! - A sleek and intuitive interface with bar charts, graphs, pie charts, and gauges with green/yellow/red lights that transform meaningless figures into actionable insights. - Ensures that the correct information reaches the right person through role-based access. - Access to a standard dashboard with pre-configured panels that make it extra easy to get started – but also the possibility to create custom dashboards if you tailor them precisely to your needs. - The ability to measure and track many of the most common HR metrics: absenteeism, turnover, number of full-time equivalents (FTEs), reasons for leaving, average age, average tenure, and more.
Do you have any questions about how our dashboard could simplify and improve the work with your important HR metrics? Read more about the dashboard in Flex HRM, or contact us, and we’ll show you!
