show that matching managerial styles to specific workers’ personality types will reduce turnover dramatically. From there,
you can forecast how much money the organization will save in
hiring and training costs.
“Nothing matters unless you can prove it,” says Greta Roberts,
CEO of Talent Analytics Corp. in Cambridge, Mass., emphatically. “HR makes mistakes by focusing on a metric and not tying
it into the business. For instance, you can’t assume higher engagement leads to less turnover. You have to demonstrate it.”
RECOGNIZE THAT HR METRICS ALONE OFFER
“You can’t look at metrics in isolation. They
IDENTIF Y THE WORKFORCE-DRIVEN COMPONENTS
have to be looked at holistically,” according to
“Really, cost-to-hire should be cost-to-good-hire,” says Ben
Yurchak, president of KnowClick, an analytics company in Bryn
Mawr, Pa. “One’s an operational metric, and the other’s a qual-
A caveat: Though quality measures might get you closer to
tracking real business goals, compiling them may be easier said
than done. “To determine the cost of a quality hire, you need
time and information from other departments,” Yurchak notes.
“Cross-functional measurement is harder to do, but it connects
OF BUSINESS-DRIVEN METRICS
Here again, the process of connecting the dots
should be done to solve a business problem that
has already been identified.
For example, if executives find that your company’s work
contains too many errors, the solution may lie in studying turnover and performance data, Roberts says. “You’re not using data
to figure out the issue,” she notes. “You’re figuring out the issue
and then knowing what metrics to examine to find the answer.”
Is revenue down because turnover is exceptionally high and thus
impacting production? Are performance and productivity down
because workers have too much to do in too little time?
Facebook closely monitors its number of daily active users.
That information hints at whether the company is hiring the
kinds of engineers who generate a positive user experience.
“Whatever drives the business has to drive HR numbers,” Spark-
man says. “HR should be waiting for the top-down strategy to
be put in place, then strategize about how HR can help the com-
“You have to parse the business challenge to figure out where
the workforce element comes in,” says Andrew Courtois, a stra-
tegic workforce planner with a California-based global technol-
ogy company he asked not to be identified. “If you can do that,
you can make a better case to management. Show how improving the workforce element improves what management wants to
improve.” Remember, he adds, “senior leaders understand things
from the cost and finance perspective. HR has to think much like
the CFO thinks about ROI.”
LEARN TO ASK THE RIGH T QUES TIONS
Another trick to using metrics successfully is to
be curious. “We have to always ask why, why,
why?” Sparkman says. When you get into that
habit, you start to ask better questions and learn to challenge
If your organization’s executives decide to hire 10 people in
Zimbabwe, for instance, inquire about the business reasons driving the decision and whether they’ve considered all of the skills the
new hires will need to succeed in such a remote location. By doing
that, “you’re helping the managers understand how far-reaching
their decisions are,” Sparkman says. “Why this location? Why
these skills? Why this time frame? It helps you get more clarity.”
• Understand the business strategy.
• Tie the business strategy to the HR strategy.
• Ask the critical human capital questions.
• Determine the measurements that will help you address the
issues at hand.
As you work through the process, it’s important to have a clear
understanding of individual roles, adds Chris Gagnon, senior
solutions partner at global management consultant McKinsey
& Co. in the New York City area. “Analytics can identify traits
of success to identify who’ll succeed, especially for pivotal jobs
that drive a lot of value,” he notes.
WORK ACROSS THE ORGANIZATION
It’s vital to collaborate with people in other
departments to get the information you need
to develop meaningful measures. Given that
many organizations regard the human resource department as
more operational than strategic, that means being proactive.
“HR’s going to have to go and get the numbers,” Fink says.
Incorporating HR data into business strategy requires something of a cultural shift. “You’re changing the paradigm,” Sparkman explains. “This is a commitment, and it’s really important
that HR both knows and works with others to understand this.
There’s going to be a lot of education involved.”
Exactly how the department gets its message out depends on
the size of the employer. “At smaller companies, you just start
doing it,” says Cezary Kuziemski, head of HR for insurance
underwriter Hamilton USA in Princeton, N.J. “Go to Finance
and say, ‘Here’s what I can do for you,’ then do it. You have to
speak the other’s language. You have to be humble and admit
what you don’t know and ask questions. You have to come to