10 HR Metrics CEOs Care Most About

business metrics chartFor as long as I can remember HR people have been trying (often failing) to gain credibility from CEOs. HR professionals can develop all HR strategies they want, implement processes and best practices, but unless those are quantifiable they’ll be hard pressed to win over the C-suite.

Fortunately, there are a number of metrics HR can capture, track to gain credibility then add value to the business and operations.

1. Costs

Training costs, average salary, salary deviation by job, cost of benefits compared to salary or as a percentage of revenue.

2. Employee engagement and job satisfaction

Survey findings, work-life balance, complaints/legal cases, level of commitment, level of empowerment, compensation satisfaction, opportunities to advance, internal promotion rate, clarity of organizational vision and effectiveness of learning & development.

3. HR pipeline

Employee salary by level, number of employees by band, employee productivity by position, attrition by level.

4. Issue management

Number of complaints, time to resolve, legal fees and cost of settlement.

5. Performance management

Average rating, problem employee rate, rehab rate for problem employees, termination rate for problem employees and average cost to terminate.

6. Productivity

Revenue per employee, profit per employee, absence rates and salary raise vs. revenue increase.

7. Recruitment

Cost per hire, time per hire, fill rate, offer acceptance ratio, interview no-shows, performance indicators met by new hires, manager satisfaction level with new hires/recruitment process, employees recruited from target competitors, voluntary and involuntary terminations in year one and costs of attrition.

8. Retention

Involuntary and voluntary termination rates, average retention period, employees eligible for retirement/early retirement and average tenure.

9. Talent and key employees

Key employee satisfaction rate/retention rate/cost rate/eligible for retirement and bench strength.

10.  Workforce diversity and inclusion

% of employees from under-represented minorities such as gender, race, disability, age and sexual orientation.

What to Do When Employees Are Taking Too Many Sick Days

“What do you mean you’re not coming in today?”

Not the response we would recommend but at times I can understand it. Absent employees result in lost sales, poorer levels of customer service and increased stress on the people who are at work.

The recent survey by Angus Reid on behalf of Kronos International highlighted the increase in Canadians faking sickness absence. Further details are available via this link.

So what can be done?

Absence Policies

Keep them up to date and ensure they are adhered to. Managers need to be trained on what the process involves and techniques needed to adopt a uniform approach in order to avoid inconsistencies.

Employee Assistance Programs

Phoning a medical professional or trained counselor rather than the line manager can produce a significant improvement in absence figures. Often operating on a 24/7 basis, such programs are often less expensive than expected particularly for larger employers.

Employee Surveys

Use surveys to assess the level of employee engagement and take action to improve it if it is lower than ideal. Sometimes employees prefer face to face discussions or anonymous suggestion boxes to the completion of surveys.

Flexible Working

With the improvement in technology employees who are sick can sometimes work from home. This will reduce the chance of infecting co-workers with viruses and bugs, whilst because many illnesses result from childcare and increasingly elder care responsibilities this means that at least some work can be undertaken. Passwords and security precautions may need to be reviewed so that files and documents can be accessed securely.

Health & Well-Being Initiatives

Proactive schemes which focus on diet, exercise and sleep prove to have a positive impact on sickness absence. Shower rooms to encourage cycling, gym memberships, subsidized yoga classes and substance abuse classes have all proved to be cost-effective solutions for our clients in the past. Obesity is likely to increase in the coming years as reported in this CBC article. Prevention can be the best treatment and cost effective solution to rising health care costs.

Incentive Schemes

One of our clients finds that the summer period is a quieter time at work, so they enter all employees with a 100% attendance record over the preceding year into a weekly draw. The successful individuals then arrange on a rota basis to take off Friday afternoons, and although some critics may feel uncomfortable rewarding workers for coming to work it works exceptionally well in certain cultures.

Key Performance Indicators for Managers

Making managers responsible for sickness absence proves to be a very effective way of dealing with this issue in my opinion. Covering absence at performance review, assessing absence when considering promotions or offering a bonus can achieve the desired effect.

Return to Work Interviews

Ensuring that return to work interviews take place for all absence emphasizes the significance of the impact involved. Managers need to be trained and then monitored to make sure this happens in the right way every time.

IN SUMMARY

Measuring absence and focusing directly on the dollars lost tends to result in sick days being reduced, sometimes quite significantly, in the workplaces where we typically get involved. Adopting a fresh approach that suits the culture and budget of the specific organization can produce a dramatic improvement in a short time.

This is a guest post by Timothy Holden, Founder of Toronto Training and HR, a provider of HR Consulting and Training services. Timothy is a regular contributor to Pivotal Post and has written popular articles such as 7 Signs Your Employees May Be About To Quit and 10 Hidden Return-On-Investments (ROIs) HR Delivers.

10 Things That Will Make Your Employees Jump Ship

A recent survey of over 1800 respondents highlighted a serious disconnect between employers and employees, identifying a significant difference between the factors which each group believe to be significant when voluntary resignations take place.

Factors identified in the survey are also in line with what I hear from individuals when they voluntarily leave an organization:

  1. Pay and Benefits

    Benchmark competitors and join a pay club to keep abreast of what is being offered in the local area or industry sector.

  2. Management and Leadership Style

    “I can’t remember what he said but I can remember how he made me feel” or a similar expression is an increasingly common point of view.

  3. Geographic Location

    Organizations based in suburbs, without a free car park, away from public transit or some distance from bars where friends gather after work struggle to retain the best people.

  4. Working Hours and Work-Life Balance

    Employers who insist on long working hours, especially where there is no flexibility or working remotely options tend to have higher than ideal levels of staff turnover.

  5. Stress and Health Issues

    Exceptionally stressful workplaces turn people off, compounded where there are no health and well-being initiatives in place.

  6. Culture

    Cultures may alter following a merger or acquisition, whilst individuals suited to a specific culture may change as they start a family; begin looking after aging parents etc.

  7. Career Advancement and Promotion

    Forward-thinking organizations recognize that huge benefits result from promoting from within and provide opportunities to ambitious individuals to test themselves at an early stage.

  8. Corporate Social Responsibility, Environment and Ethics

    Employers that don’t embrace a green approach and operate in an unethical way typically struggle to keep hold of their key talent.

  9. Honesty, Trust and Integrity

    Deceitful communication and broken promises engender an atmosphere of negativity where good people walk away.

  10. Engagement, Morale and Motivation

    Low productivity and poor customer service often results from low levels of engagement, morale and motivation and leads to voluntary attrition where employees become disenchanted.

This is a guest post by Timothy Holden, Founder of Toronto Training and HR, a provider of HR Consulting and Training services. Timothy is a regular contributor to Pivotal Post and has written popular articles such as 7 Signs Your Employees May Be About To Quit and 10 Hidden Return-On-Investments (ROIs) HR Delivers.

When Should Start-Ups Start Considering HR

HR tends to be one of the last areas considered by start-ups in my experience, but this can be something of an oversight. Most start-ups by their very nature are founded by entrepreneurial individuals, who quite rightly may invest most of their energies in selling, meeting customer demands and cash flow.  However, start-ups reach a point where they need to “employ a stranger” for the first time, when they can no longer fill a vacancy with family, friends or ex-colleagues. It’s at this stage that start-ups need to enlist services of an HR Professional who can help them build an employer brand, develop HR policies, recruit best talent and setup a competitive compensation structure.

Employer Branding

Smaller employers, which naturally include start-ups, lose out to more established organizations on securing the best talent. Perhaps their website is not particularly professional, their Google ranking is pretty low, their address is not a fancy downtown location or simply job seekers with relevant skills/experience have never even heard of them. Effective employer branding drives a greater quantity and quality of applicants to adverts on the likes of Monster and Workopolis, and proves crucial in maximizing the likelihood of candidates showing up for interview and accepting job offers when offered.

HR Policies

Robust policies around topics such as bullying & harassment, dismissals and termination, misconduct, performance and working hours reduce the chance of costly and time-consuming tribunals.  Experienced HR Professionals, Consultants and HR Outsourcing Firms can develop all necessary policies, contracts and offer letters.  Law firms can also be used to compliment your existing HR resource ensuring all documentation and policies comply with all relevant Employment Standard Acts and legislation.

Interviewing and Recruitment

Trained interviewers tend to hire the best person and also possess the skills to sell the job and organization to interviewees who may be somewhat reluctant to join a start-up. Start-ups do not normally have the benefit of speculative approaches from applicants and have to go out and find the best, possibly using the benefit of starting a job that no-one else has previously undertaken which undoubtedly appeals to some people.

Pay and Benefits

Without the latest data on compensation trends in Ontario, start-ups can struggle to offer a competitive package, compounded by the scenario of limited benchmarking data. Entrepreneurs often believe they have their finger on the pulse of their marketplace, but these numbers change rapidly and employers with a limited track record may need to pay more to ensure high-achievers join them rather than more established organizations.

10 Hidden Return-On-Investments (ROIs) HR delivers

As the world economy teeters on the brink due to the Eurozone crisis, HR must be constantly seeking ways to demonstrate value is being added to the bottom line. Some of these ROIs are obvious in the form of reducing absence rates and cutting time or cost per hire, but others are less well-known. Based on a recent presentation at “Raising Productivity” seminar, it is recommended to focus on the following hidden ROIs:

HR Cost

This can be expressed in terms of per employee or as a percentage of annual revenue.

Level of responsiveness shown

To avoid accusations of bureaucracy and paper-shuffling, calculate the time to respond to a particular issue or the time to resolve the problem.

Recruitment

Other than the aforementioned time per hire and cost per hire, analyze the records for offer acceptance rate, interview no-show rate and termination rates within the probationary period.

Performance management

New clients often find it difficult to measure performance objectively so we sometimes work with them to define a “problem employee” and then determine the percentage of problem employees, rates for rehabilitation/termination and costs of termination.

Talent management

Equally tricky is the definition of “key talent” but once this has been established it is important to quantify rates of satisfaction, retention and cost. It makes sense to look at the talent pipeline too by assessing employees hired from competitors and attrition per department or job title.

Payroll costs

As budgets get squeezed and pay raises become less commonplace, why not work out average salary of employees, salary deviation by job level and cost of benefits as a percentage of salary or a percentage of revenue?

Job satisfaction

Employees with high levels of job satisfaction work harder and give a better customer service in our opinion. With this in mind why not include in your annual survey topics such as level of empowerment, satisfaction with compensation and clarity with organization vision?

Diversity and compliance

In order to employ a workforce that reflects your customer base, record changes to gender split, ethnicity, percentage of disabled people employed etc.

Retirement

Canada faces a huge challenge later this century with its aging population, and I read with interest the recent Globe and Mail feature on immigration as a way to provide a solution (you might want to visit the link below):

http://www.theglobeandmail.com/news/national/time-to-lead/why-canada-needs-a-flood-of-immigrants/article2423585/

With this in mind it may be appropriate to gauge changes to the number of employees eligible for retirement and early retirement.

Issue management

We use this category as a catch-all for metrics which include HR complaints, average time to resolve complaints, legal fees and settlement costs/penalties.

To conclude, talk in numbers to be accepted as a true business partner by senior management!