BC HRMA offers new HR metrics service

A new HR metrics service from the British Columbia Human Resources Management Association (BC HRMA) will help HR professionals become more strategic by using people and financial data to make workforce planning and HR decisions.

“To move the profession forward in that way means credibility,” said Helen Luketic, the manager of HR metrics and research at BC HRMA.

When an organization signs up for the BC HRMA HR Metrics Service, which was one year in development and opened up to all B.C.-based organizations in May, it commits to providing 20 core data points on a quarterly basis.

The service costs BC HRMA members $1,500 a year and non-members $2,500 a year. The data, which includes HR metrics such as revenue per full-time equivalent (FTE), voluntary turnover and labour cost per FTE, is then entered into a large databank where it’s audited and reports are generated every quarter.

Participants have access to a report that ranks the organization’s scores against an average and a range, but all of the association’s members have access to a summary of the metrics.

Even though there are only reports for the first and second quarter of this year (20 firms participated in the pilot and 10 more joined for the second quarter), there are already some interesting trends emerging, said Ian Cook, director of research and learning at BC HRMA.

For example, revenue per FTE and profit per FTE decreased from the first quarter, which means organizations are getting less value from workers, said Cook. Also, voluntary turnover increased from 5.5 per cent in the first quarter to 6.1 per cent in the second quarter.

“Q1, we figure, was as bad as it gets. It was the depth of the economic crisis,” said Cook. “We’re now seeing (voluntary turnover) start to increase. We expect that to keep on increasing as signs of economic recovery start to come through.”

And while many people assume the average retirement age is about 65, the data from participants shows it’s actually 60, said Luketic.

“So if you were under the impression it was going to be 65 and that’s what you were basing a lot of your hiring and development on, then you’re out of whack in quite a big way,” said Cook.

By providing a more accurate snapshot of where an organization is, the HR metrics service will help HR make predictions about where the organization is going and develop workforce plans to help it get there, said Abby Kidd, director of customer and employee support at Coast Mountain Bus Company, a subsidiary of Metro Vancouver’s public transit system Translink.

“We’ll be able to develop HR strategies and business strategies to ensure that we can get to the outcome that we want to get to,” said Kidd. “If you are working on a plan of where you want to be in the future and you have no idea what your current environment is, there’s no way you can plan for the supply or demand or do any forecasting at all.”

For Kidd, who has a technology background and moved into HR three years ago, having that kind of data has been a long time coming.

“When I moved over to HR, this was really missing. There was no research or data to support programs that were going on,” she said.

The act of gathering the data is itself very useful to an organization, but the added value comes from being able to compare the organization against other businesses, said Lynn Roberts, vice-president of HR at Coast Capital Savings credit union in B.C.

“It’s one thing to be able to take an internal look but you need contextual reference for it to mean something,” said Roberts.

But if an organization isn’t going to act on what it learns, it shouldn’t bother collecting the data, said Roberts.

“It’s to help you make better decisions about the areas within your people practices that need critical attention,” she said.

BC HRMA has tried to make the process as easy as possible for participants. There’s a user guide and online webinar to introduce participants to how the system works, and a metrics standards and glossary lets HR professionals know exactly what kind of data the association is looking for.

When an organization first signs up, it takes a lot of time and effort to find out how and where to get the data. But once the organization has been through the process once, it’s much faster the second time, said Cook. Most participants only take about four or five hours every quarter to generate the required data, he said.

“We’ve done a lot to simplify and make accessible the whole process,” said Cook. “We’ve reduced the number of barriers to entry for the HR profession.”

One way BC HRMA has simplified metrics is with the cost of voluntary turnover. Several studies have found turnover costs an organization 1.5 times an employee’s salary.

To give participants a good overall gauge of the average cost of turnover, BC HRMA has them multiply the salary of each person who left the organization by 1.5. The service then generates an average and a median value for each organization and for all the organizations together.

“It’s not 100-per-cent accurate but it gives you enough of an idea,” said Ian.

Using this method, the average cost of voluntary turnover in the second quarter was $22,602 and the median cost was $54,058.

BC HRMA is looking to partner with other provincial associations to open the service up across the country.

Metrics dashboard

Summary of HR metrics

Every member of the British Columbia Human Resources Management Association (BC HRMA) has access to a summarized “dashboard” view of HR metrics that are compiled from organizations participating in the BC HRMA HR Metrics Service.

Each organization must submit 20 core data points in seven categories: compensation, HR efficiency, learning and development, productivity, recruitment, retention and workforce demographics.

The following is a sample of the metrics summary the association provides members on a quarterly basis.