Integrating HR Metrics into Your Business Strategy: A How-To Guide

In today's business landscape, data-driven decision-making is paramount. As a seasoned business leader, you've seen firsthand how tracking key metrics can transform how you attract, convert, and retain customers, as well as how you can assess the performance of your production lines, plant, or entire company.

But what if there’s a hidden data set that isn't getting the attention it deserves? Picture yourself as a detective solving the mystery of underutilized HR metrics. Most CEOs I know are deeply invested in their people (and their budgets.) If that sounds like you, it’s time to uncover the secrets within your HR data to:

Make informed, strategic decisions
Pinpoint the most effective areas for investment
Control labor costs efficiently
Measure the impact of your programs
Elevate the overall employee experience

Do HR Metrics Even Matter?
*Cue Paul Hollywood-esque Icy Glare


HR metrics are more than just a boilerplate for your quarterly board deck. They're the magical insights for managing your workforce and achieving your strategic goals!

Imagine you're running a unionized distribution company. Wouldn't you want to know how labor relations are faring between contract years? How many grievances are being filed and what are they about? Are they being resolved, and if so, how effectively? What’s the call-out rate, and how does it vary between shifts, departments, or managers? How is productivity trending, and are employees completing their safety training? These insights are invaluable for maintaining smooth operations and addressing potential issues proactively.

Alternatively, consider a niche supplier that relies on top talent and unique intellectual property. Are your job offers being accepted? What’s your average compensation penetration? What’s your attrition rate, and why are people leaving your company? Are your benefits competitive, and do they align with what employees actually want?

Perhaps your sales team has been underperforming compared to previous quarters. By analyzing employee data, you can identify trends and patterns related to their performance, such as training needs, workload distribution, and bonus payouts.

Suppose you discover that new sales reps who stay on a 50/50 base/commission mix for nine months instead of six and attend an advanced training session have consistently higher conversion rates. This insight allows you to strategically invest in compensation and more comprehensive training programs for the entire team, thereby boosting overall sales performance and maximizing your return on investment.

Furthermore, by monitoring employee satisfaction and engagement, you can implement initiatives to improve morale, which in turn can lead to higher productivity and a more motivated sales force.

A Roadmap for Turning HR Data into Actionable Insights
  1. Start with a Question
    Think about your workforce. What's making you curious? Maybe questions like:
  • Is our turnover rate high compared to our competitors? What's that costing us? How much are we spending on temp agencies and OT?
  • Are we attracting and keeping the talent we need?
  • Does “x department” have enough people to smash its revenue goals?
    Is our onboarding process a success?
  • Are training programs helping employees learn something the company will benefit from?
  • Do our workforce and leadership demographics reflect our diversity goals/customer base/community?

2. Answer Those Questions And Then Ask, "Why?"

Time to play detective! Dig deeper into your data to uncover the "why." This might mean collecting more data, but trust us, it's worth it. Understanding the "why" will help you filter through the data and determine what you can do better.

3. Make A Change To Close The Gap

If your new hire turnover seems high, and your metric confirms it, you should check your recruiting criteria and onboarding experience. Or maybe your compensation package is not as strong as the market demands, or perhaps you discover the hiring manager is kind of a jerk until new hires “prove themselves.” HR metrics are relatively straightforward to decipher but are only "actionable" if leaders do something with them.

4. Communicate, Communicate, Communicate!

Share those shiny HR metrics and data with everyone in the organization. Make sure each business unit takes ownership of the numbers and the needed changes. For instance, a sales team hearing about low computer training completion rates might decide to set up in-trade "work withs" to engage learners more directly, coach performance in situ, and build team rapport.

5. Setup KPIs for HR

Finally, create HR KPIs that align well with a company's objectives. Use your business goals (e.g., increased revenue in a particular market) and cascade them through every department - including HR. Ask yourself and your team how optimizing your (HR) processes can contribute to achieving them.

Finding and Tracking Your HR Data

Ok! So, where do you get this gold? The good news is that you're required to track most of the data you want under federal and/or state law. The bad news is that it might take some work to massage it into the format you want, especially if you don't have a “system.”

If that's the case, this probably means collecting more data, but keep digging! Don't throw in the towel yet!

Grab a notepad and make a list. Who handles payroll, benefits enrollment, accounts payable, timekeeping, productivity, recruiting, hiring, scheduling, benefits, logistics, onboarding, performance, and offboarding? You'll want to talk to all of those folks.

HR tech has come a long way from old-school time clocks! Now, there are many systems to help you gather, analyze, and report data, including HR Information Systems (HRIS), People Analytic platforms, and Talent Management suites. Even if you're not tech-savvy, you can track most of this data in a simple spreadsheet.

Hopefully, you’ve surfaced some new questions - if so, excellent! Asking the right questions is usually half the battle, and using HR metrics in your business plans, can turn "compliance data" into strategic, useful information.

This process involves asking clear questions about the workforce, procedures, and programs and looking at the data more closely. Analyzing and communicating these insights helps everyone involved understand and track the company's goals, which helps create a culture of transparency and accountability.

Happy data diving! ????

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