Human resources by the numbers (Editorial)

Sometimes you just have to go on faith when it comes to the business of people
By John Hobel
|Canadian HR Reporter|Last Updated: 04/25/2006

As HR professionals grow into stronger business partners, practitioners will find themselves more and more focused on metrics. To prove value-add and get support for HR initiatives, reporting the numbers the way CEOs and CFOs want them is a business essential.

But some things are easier to put on an accounting ledger than others, and in this respect HR is challenged more than any other department. It’s one thing to cost-out the life expectancy of a machine and calculate the productivity gains of technology, but linking employee workplace contributions to wellness or recognition programs is quite another.

In this issue of

Canadian HR Reporter

, HR numbers are front and centre. On one end of the spectrum is the CloseUp on salary benchmarking, on the other the need to measure the quality and impact of employee assistance programs as examined in the Report on Healthy Workplaces.

The CloseUp has some good tips on how to ensure valid comparisons when benchmarking salaries and examining jobs in different organizations. There’s a science to it that can be served up for compensation decision-making. At the end of the salary benchmarking process, management should know how much they “should” pay for a position. The question that remains is usually, “Can we afford to?”

Not so with EAPs.

As the Report on Healthy Workplaces notes, the confidential nature of EAP counselling makes it difficult to monitor the program a vendor offers. And on top of ensuring human resources is getting the best bang for its buck, HR has to sell senior management on the value of paying for an EAP to begin with.

There are ways to get a handle on the quality of an EAP service. To start, remember the axiom “You get what you pay for.” If the search for an EAP provider is chiefly characterized by trying to bargain the least expensive package, then don’t be surprised when there are service gaps.

An EAP’s effectiveness can be measured in usage, through reports on employee satisfaction and even anecdotal information from managers who witness positive changes in employees who use the service (there will be instances, such as substance abuse, where managers are aware of EAP utilization despite confidentiality).

But it’s unlikely an HR professional could ever walk into the CEO’s office and present an EAP’s exact contribution to the bottom line. Some of this will just have to be taken on faith.

How does one quantify the value of marriage counselling services? If an employee spends most of his mental energy fretting about the state of his personal life, what’s the return on investment to the organization if counselling solves the problem?

If an alcoholic gets help with her addiction, HR can show the dollar-value of improved attendance, but what price is attached to hangover-free workdays?

The Global Business and Economic Roundtable on Addiction and Mental Health estimates depression costs Canadian businesses $33 billion annually. So how much would eliminating the problem save your firm? HR could do some dividing to determine the average cost per Canadian worker and then multiply by an organization’s headcount, but, while you might get some points for creativity, that’s not going to impress the C-suite.

Yes, metrics are important, and HR has to apply them as best it can. But sometimes you just have to go on faith when it comes to the business of people. And in that respect the last word goes to Gerry Boss, director of HR at Jones Packaging in Ontario, who describes what happened when an employee with a drinking problem was referred to an EAP (page 16).

“The person went from complete alcohol dependency to being completely dried out. That kind of thing reinforces that there’s value to an EAP, without being able to put exact metrics to it.”

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