Here we go with everyone's favorite word: metrics. If you love data and digging into what the numbers show and possibly predict, you just cheered.
If you're more in the camp of "I know I should understand metrics better but I have a million other things to do," we understand that, too.
Today, we'll try to convince that second group of folks that it's past time for HR pros to offer up metrics that matter to the rest of the organization. Why? Because this is what you need to do to demonstrate success and get organizational buy-in to prove HR's value to the C-suite. Often, HR uses proprietary metrics that CFOs, sales, legal, product and marketing don't care about, so these metrics garner little attention.
But you, savvy HR leader, want more. You want buy-in for HR initiatives and programs, so you need to pony up the best metrics that speak the language of business. Decisions are being made in the organization and most of those decisions are based on analytics. HR has to start speaking the language of data or we're in trouble when it comes to getting our slice of the resource pie. Emotion and fuzzy facts won't get us very far at all.
There's room to grow
It's true: HR pros are not known for being data savvy. We need to do better because we owe it to our organizations to have the right data to make the right decisions. After all, we are the experts on our "people data," right?
Have you ever faked the data? I'm talking about making a spreadsheet and throwing in course completions, scores, time to hire, etc. The truth is, we can't fake it like that anymore. The rest of the business relies on the accuracy of our data. Plus, when we push weak metrics, CFOs' eyes glaze over.
Why? Because they're looking at HR to provide the real metrics to back up what we're doing. If we want investment, buy-in and everything in between, we need to be ready to show our data and back it up with strategic thinking.
1. Frame data around competition
This was some great advice from HR thought leader Tim Sackett that he delivered at our Saba Insight 2018 customer conference. Executives love competitive data but it's rare anyone gives it to them. So, you will need to "frame" it for them. Framing is when you place a specific perspective on a topic. Executives will pay closer attention to your story when you can tell a story by framing it around competitive data.
For instance, let's say store sales are slumping in one region. Competitor A in the same region enjoys strong sales (they are a public company, so you were able to do some online digging for revenue figures broken out by state). Your data tells you that people are buying more of Competitor A's products, and fewer of your own company's wares.
From conversations with store staff, you learn that new hires spend weeks navigating online "training." They are frequently off the floor tethered to computer terminals in the breakroom. A little more digging shows that Competitor A is a client of a leading learning management system. Sure enough, your competitor is even featured in a case study that shows in-store staff learning about new sales promotions on mobile devices using their LMS. When you complete your investigation of Competitor A, you know you have solid competitive data and research to show your executive team.
2. Pick one thing
Ask yourself: do you really know what's on the mind of your CFO today? This is important because if you know what they are thinking - what's keeping them up at night - you have a better chance of being heard if your solution addresses it. As HR, our job is to align with the major business drivers of the organization.
Here are five drivers your CFO is definitely thinking about:
Let's look at productivity as an example. And let's also assume you are seeking a pretty hefty investment in a new talent management system. It makes sense that improved talent management tech would have a direct impact on productivity. One question your CFO will have is, "Are we getting the value out of every dollar we spend?"
We have to now tie our business case to productivity by showing how we are going to be more productive (and save money) by developing our people and using our resources more efficiently. We'll have to come up with ways to measure productivity (chances are, your industry has methods such as output per hour or billable hours versus total hours worked, etc.). The key is to find the metric (or metrics) that will allow you to figure out whether you are solving a real productivity problem or not.
In these exercises, remember that finding HR metrics that work is all about HR demonstrating its strategic partnership to the business.
3. Start predicting the future
To be strategic, HR has to stop reporting and start predicting. Unfortunately, most HR reports look to the past, and little focus has been placed on the predictive use of data. You might not have true predictive analytics, but how comfortable are you and your team at using data to directionally predict the future and identify gaps?
With time, you can use analytics to become predictive. You may already have this data! Use it to answer questions such as these:
- Which of my HiPO (high-potential employees) are at risk for leaving the organization in the next year?
- Who will be the most successful employee in our company?
- Which HR programs (I.e. training, reward and recognition initiatives) will most impact the bottom line?
There are many more HR metrics to uncover; we have presented just three. But with a crystal-clear set of data in hand (and a story to go with it), HR leaders have an excellent chance of getting a seat at the decision-making table. When it's your turn, take a deep breath and go for the (big) data.