Transform HR Metrics Into Business Strategies


HR metrics are indicators that allow Human Resources to keep up with and measure employee performance in a variety of sectors. More so, Human Resources metrics are a key component into knowing what affects your business when it comes to your employees or talent.

Transforming HR metrics into business strategies is a valuable approach to both small and large businesses. It allows the company to gauge employee performance, employee turnover, and employee engagement – and that is just the start to a wealth of information that helps business practices.

According to ChronOpens a new window :

Metrics report current, ongoing and year-over-year numbers for common areas of HR such as turnover, employee engagement and performance, and many organizations base incentives on management’s performance to HR metrics. HR metrics that are aligned with corporate and business strategy add value and drive organizational effectiveness.

These metrics are best used when they are turned into business strategies and here are a few examples and how they can work for businesses.

Simply put, HR metrics gives businesses actionable information that can be used for more robust performance and sales – if applicable.

Employee Performance

Employee performance is the life blood of any business and HR employee performance metrics are integral to a business for a number of reasons. These metrics are used to measure anything from sales performance to customer service productivity and manufacturing production.

By using employee performance metrics, it is easier to find out where your staff is excelling and where there is room for improvement or areas that need addressing.

A good example is sales team metrics where top performers are rewarded for their hard work and those who are not performing as well can see where changes should be made. However, employee performance is valuable in any capacity because how the employees are performing affects every aspect of the business.

Employee Turnover

Having data on employee turnover is imperative in making business decisions with the budget and strategic planning. It is up to the Human Resources department to have working knowledge of the needs of the business and this includes knowing how many employees are needed at any given time. With employee turnover metrics, this aids in decisions on recruiting new talent.

It is also a helpful idea to be able to compare the turnover rate with similar industries in order to see if there is an issue that is causing a higher rate than the competition.

Employee Engagement

Knowing the engagement value of employees is a little more difficult than simply running the numbers. However, the knowledge is indispensable so it is important to find the information. This is possible with things like employee surveys, open dialogue, and meetings where employees are allowed to discuss their concerns.

A helpful example from Business News DailyOpens a new window states the following five tips:

  1. Define what employee engagement is. This can be productivity, happiness, or anything relevant to an employee’s investment and development.
  2. Conduct surveys. As mentioned previously, surveys are a good indicator of employee engagement but keep it to a couple of questions. If you want true answers, make it anonymous.
  3. Ask quantitative and qualitative questions. Not only should you ask questions, they should be the right questions. Something as simple as, “Are you happy at work?” or “Do you feel that your work is of value?” can garner you a good idea of true employee engagement.
  4. Have individual conversations. Many companies perform exit interviews, and that is a good idea to see what went wrong. However, conducting an interview with current employees is just as important. This allows you to see what is being done that makes them want to remain with the business and how you can apply that in other situations and with other employees.
  5. Plan to measure employee engagement often. It is crucial to measure employee engagement more than just once in a while or when there is already a problem. A survey twice a year gives twice the insight than just a yearly survey.

Measurement Plans

Last but not least, in order to better define and implement the HR metrics data, businesses should use the key components mentioned and create a measurement plan that does things like: defining the metrics, who will be performing the measurements, identifying the business questions to be answered by measurement, and what will be invested to find out the HR metrics.

HR data is incredibly valuable to every business and putting that data to use increases the chances of a more successful and lucrative company. According to ForbesOpens a new window :

HR teams can use data to make better HR decisions, better understand and evaluate the business impact of people, improve the leadership’s decision making in people-related matters, make HR processes and operations more efficient and effective, and improve the overall well-being and effectiveness of the company’s employees. All of this can have a huge impact on a company’s ability to achieve its strategic aims, and that’s what makes HR data so valuable.

By using the tips above and using data-driven HR metrics, many questions about why people are not engaged, why they leave the company, and more – is answered.