HR metrics is not a new concept in the human resources realm. Back in the 1990s, I attended a conference in Florida where one of the keynote speakers, John Sullivan, delivered a session on how to measure the impact of human resources using formulas that would speak directly to the mindsets of CEOs and CFOs.
Soft reporting would never support the HR profession’s wish to be strategic and respected partners, he said. This was at a time when many HR professionals were not invited to sit at the senior executives’ table and many believed the business contributions of HR could not be measured.
Sullivan stressed that hard measurables that point to the dollar impact on the corporation were needed in order to get the attention of the C-suite.
That was then, and it has taken some time for HR metrics to become commonplace at organizations.
But today, senior human resources executives have joined the C-suite team in every sector and industry and HR metrics are now a part of executive management language.
To gain firsthand insight into what is important at the C-level, I spoke with eight senior executives in Saskatchewan about HR metrics.
The economic boom in the province and shortage of skilled labour has put HR front and centre, and HR metrics are definitely a regular topic of discussion at the corporate table — along with other metrics such as safety, finance, marketing and environmental targets.
AREVA Resources Canada
Mining company AREVA Resources Canada, a subsidiary of the AREVA Group, tracks HR metrics that are aligned with the company’s strategic plan and commitment to the north. Key metrics centre on building a representative workforce and training goals, which are measured by department.
Areva’s senior leadership is very people-focused and a healthy debate about HR numbers occurs at the corporate table, according to Bruce Walls, vice-president of human resources. The company has learned to watch trends from month to month and year-to-date rather than set hard targets for a representative workforce.
“Setting metric targets can create bad behaviours,” he says, with managers focusing on hitting the quotas rather than making good hiring decisions. Many variables have to be considered when a company is determining what to track and how to track it.
West Wind Aviation
Some of the key metrics that support West Wind Aviation’s business in a tight labour market include employee engagement ratings, retention and turnover rates, compensation cost per employee and training cost per employee, according to Dianne Stefanko, vice-president of corporate services.
She also links improved labour practices with overall company costs and workforce productivity.
“The most common error HR makes when creating metrics is a one-size-fits-all approach when implementing and creating metrics, instead of a collaborative approach that makes implementing and creating exciting and fun,” she says.
Publicly traded companies such as PotashCorp have a strong commitment to external and internal reporting on the impact of HR, and key HR metrics are tied to and support the organization’s strategic plan.
Attracting, retaining and motivating employees is a strategic goal monitored with metrics such as employee engagement levels, internal promotions, offer and acceptance ratios and turnover rates exclusive of retirement, according to Lee Knafelc, vice-president of human resources and administration.
Although PotashCorp has a low voluntary turnover rate, this metric attracts his attention.
“Why are voluntary departures happening when the company invests so much in finding and investing in the right people?” he asks.
In his opinion, metrics move beyond numbers and when it comes to turnover, they provide an opportunity to dig deeper into a corporate brand strategy that focuses on attracting and retaining the right people.
HR metrics are also important support mechanisms when driving change at an organization. Scott Banda, CEO of Federated Co-operatives, is leading the organization through a culture change and thinks this a different metrics lens.
“Traditional metrics have to be looked at differently when trying to evolve a culture and introduce new ways of doing business,” he says. “Metrics such as turnover, promotions from within and training dollars invested all have to align with driving behavourial change.”
As the culture change project moves forward, new metrics will evolve. Determining the true business drivers and getting the right metrics requires thoughtful steps forward and should not be rushed.
Saskatchewan Institute of Applied Sciences & Technology
Larry Rosia, president and CEO, is also leading change at the Saskatchewan Institute of Applied Sciences & Technology (SIAST).
“It takes time to nail down the right HR metrics but they need to ultimately be tied to the strategic plan and ROI,” he says.
Without HR metrics, it is difficult to collect concrete evidence on progress in areas that need improvement. Leading an organization forward without metrics is like “driving a car without a speedometer,” says Rosia.
He currently monitors a standard set of human resources metrics at SIAST such as employee engagement and turnover to build a picture of how the institute is moving forward and building a culture of accountability.
City of Saskatoon
Sometimes it’s easy to forget the role of HR in the organization, but HR metrics show the impact, says Murray Totland, city manager for the City of Saskatoon.
The metrics of particular interest to him include turnover and retention rates, training cost per full-time employee, days to hire, retirement eligibility, occupational health and safety metrics and diversity numbers.
These metrics give the senior management team a good picture of how the city compares in a competitive marketplace and provide insight on the impact of HR on operations, he says.
And Totland looks forward to the next step — tying HR metrics to the city’s strategic plan.
Saskatchewan Teachers’ Federation, Saskatoon Public School Division
Both the Saskatchewan Teachers’ Federation and the Saskatoon Public School Division primarily focus on qualitative data to assess the impact of human resources on their organizations.
At the federation, a developing HR function is focusing on assessing and aligning the organization’s culture to ensure its ongoing ability to attract and retain the right people, according to Gwen Dueck, CEO.
Executive management has not considered quantitative measurement at this point, but the organization does track some statistics related to human resources such as turnover rates and number of applicants, she says.
At the Saskatoon Public School Division, the first item on the weekly executive meeting is “our people, where qualitative updates on human resources and issues in the organization are shared,” says Jaime Valentine, superintendent of HR.
Workforce demographics related to potential retirements and diversity goals in response to a growing immigrant population and labour shortage are key metrics that are tracked. Other metrics include turnover, sick leave usage and quality of candidates.
“Education is getting better with collecting data,” he says, adding he expects that a project underway to establish standard HR metrics in Saskatchewan’s school divisions will be a seminal building block for the future.
The C-suite gives serious attention to HR metrics and views them as key indicators of the impact of HR on the business. Metrics need to support the accomplishment of the strategic plan and are not a one-size-fits-all proposition.
Careful consideration must be given to which human resources metrics are important to the organization’s goals and depend on where it is in its development, what is going on in the marketplace and the potential impact of a metric on behaviours.
What you measure will drive behaviours and outcomes.
Peggie Koenig is president and CEO of Koenig & Associates and president of INTELL Executive Search in Saskatoon. She can be reached at (306) 934-1774, firstname.lastname@example.org or visit www.koenig.ca for more information.