Nick Kemsley, co-director at Henley Business School’s Centre for HR Excellence, shows the kind of top-level process he takes organisations through when working with them on their data and metrics approaches, recognising that each may start with a different baseline in terms of what they need or have.
Although I am sure that the metrics alignment blueprint below does not cover every nuance, I hope it is helpful in showing how HR data and metrics are an integral part of the transition from strategy to execution and renewal, and that there is a logical flow to the various elements.
Strategic workforce planning
I have written previous articles about strategic workforce planning, and when it comes to data and metrics it is a vital step. Strategic workforce planning helps us understand what the most important things to measure are from the point of view of business goals, and is therefore the factor that has the biggest effect on creating engagement and credibility at senior level.
HR data and metrics series
Two previous articles on HR data and metrics – “Six steps to double the business value of HR data part one and part two” – outlined the opportunity for HR to work differently in this space, and suggested six steps that HR functions could follow in order to increase the value of their data to business.
The next two articles in the series provide a blueprint to guide HR functions in overhauling their data approaches and offer an example of how this could be applied to something tangible: talent metrics.
This article presents a blueprint for alignment of HR metrics with business objectives, and some commonly used HR metrics. The next article will show how aligned talent metrics can provide more insightful data, presented in a more relevant way and drawing attention to business-critical talent issues.
Metrics development and synthesis
Metrics development and synthesis is the area where we assemble the right suite of metrics and identify how they can be configured to create relevant insights, rather than just information. It is also where top-down data demand meets bottom-up data supply, helping you to make the most of what you already have in the context of what is most important to the business.
We must avoid using data just because we have it – much as in the story of the man looking for his car keys at night under the street light, he has not dropped them there but at least he can see. Starting with the business need helps focus data collection and analysis. This is especially important if an organisation is in the process of implementing an HR information system.
In the articles “Six steps to double the business value of HR data part one and part two“, I also talked about the importance of looking at outcome metrics at least as much as process metrics. In HR we can sometimes think of process as a comfort area, and an inability to link process and outcome has been identified as a key barrier to developing HR credibility. In addition, hiding behind process metrics and ignoring outcomes can give us the illusion that everything is fine simply because we are measuring the wrong thing.
Data presentation and reporting
Data presentation and reporting is where we ensure that the insights we identify are presented in the most effective and engaging way, in order to tell the best story that the data can support. Key to this is the transition of the HR data pack from what is sometimes an unchanging wad of partially relevant information, to a much more palatable topically focused summary of key insights relating to critical business issues. It should be presented in an intuitive way, not just as an impenetrable collection of numbers.
Action planning and monitoring
It is of critical importance to monitor risks or key indicators, and establish whether or not any actions to address these are making a difference. This is absolutely vital if HR is to avoid snatching defeat from the jaws of victory when using data and metrics to drive functional credibility. Action without data, and data without action, are both highly wasteful.
Applying this approach to talent metrics
So, let’s get tangible. Imagine that you are an organisation with a strategy that, like many, requires the business to make a shift from A to B in terms of product and service offering, territory, profitability or other factors. Many organisations already have talent metrics, but how many would really stand up to the acid tests referred to in the blueprint? How specific are they in relation to strategic aims? How insightful are they in terms of identifying risks to be managed or opportunities to be leveraged? What do they tell us about the effectiveness of our people processes? Do they give us a clear idea as to how much progress we are making?
The initial question here is in the area of strategic workforce planning. This relates to the talent implications of the business objectives, and the degree to which we have put in place the right things to deliver against these talent needs in the right places at the right time.
As an example, imagine a technology-based organisation, with an established engineering-biased and long-tenure culture, that is wishing to migrate much of its future business to an e-commerce platform. Strategic workforce planning methodologies would explore the organisational implications of these key strategic planks. Such an approach might identify the following issues:
- digital marketing capability is a key skills gap;
- work must be done on employer brand in order to appeal to people with these skills; and
- there may be cultural issues in assimilating individuals with these skills into the existing organisation, and retaining them.
Now that we have some context through strategic workforce planning, we can start to look at metrics development and synthesis. In our example organisation, imagine that existing talent data covers typical areas such as:
- time to hire;
- percentage internal versus external hire;
- total attrition rate;
- basic performance data – for example, rating profiles; and
- basic succession data – for example, roles with “ready now” successors.
Without the context of the strategic workforce planning phase, this is terribly generic. How relevant is the percentage of internal versus external hire? Is the total attrition figure good or bad? Strategic workforce planning hints at the need for some much more insightful metrics. Contrast what the organisation currently measures with metrics such as the following:
- Is there brand recognition among target candidate groups? There is a need to know if awareness is being created in candidate groups that may not currently think of the organisation as an employer of choice. This information could be provided by resourcing partners or a specialist third party, and can be trended over time.
- What is the offer-to-acceptance ratio for those in critical skills groups? This helps gauge the attractiveness of the organisation to target groups. If this ratio is not favourable, or trending down, why is this?
- What is the percentage of new hires in critical skills groups leaving within one year? This helps identify what may be cultural or career influences on retention of individuals with critical skills.
- How many “out of band” salary offers are being made? This information helps hint at the organisation’s attractiveness as an employer, but also provides insights as to the alignment of reward policies with strategy.
- Is the business keeping up with, or falling behind, our resourcing profile for critical skills? Broadly, is the capability required put in place at the right rate and in the right places?
The above examples happen to have an attraction and retention focus because of the nature of the scenario I chose, but the same principles could be applied to internal capability. For example, strategic workforce planning may equally have thrown up some needs around future leadership capability.
In the fourth article in this series, I will look at more internally focused talent metrics that can provide more insightful data presented in a more business-focused way, drawing attention to matters of critical relevance. This may well be more successful in engaging a senior audience in people data and metrics and in making HR a more credible partner, because the function can bring to bear insights based on its own expertise that the business lacks.