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!