Tag Archives: Metrics

HR Analytics: Start with the Story

Back in college I wrote a ton of papers for various classes. Without fail, my writing process would look like this.

  • Read some of the research available and form an opinion.
  • Write an essay based on that opinion.
  • Go back and find data to back up my essay’s key points.
  • Get about 95% finished and realize that the paper didn’t turn out like I wanted it to originally.
  • Rewrite the entire thing from scratch (usually with just a day or two left until the deadline)

analysisThis was a painful process, but it usually yielded fairly good results. I think that many of us try to do the same with this big data/analytics concept. We immediately go out and start gathering HR data, hoping to make some incredible discovery that will revolutionize the way we do business. Continue reading →

Stop Wasting Time Measuring HR Data

Please. For goodness sake, please stop measuring HR data.

See, I know why you’re doing it. You heard this “big data” thing it was a good idea, and you started gathering information. Then you realized how easy it was, so you started pulling together even more from a variety of sources. You’re hitting up your applicant tracking system, payroll system, and other data feeds to get what you want. I know, it’s hard to stop.

But then you did what many others do–nothing. You took all that information and you sat on it.

Why?

Because you didn’t slow down and start with a plan. You need to know ahead of time (or at least have a general idea) about how the information can help you. If you’re gathering data for the sake of gathering data, then you are wasting time and resources, and you’re probably harming your credibility as well.

On the other hand, if you started with a plan to associate the data with business outcomes to actually prove a point, then carry on. I hope you make better decisions and deliver more value to the business based on what information you’re pulling together.

A quick test

Here’s a quick test to help you figure out what data is valuable and which is not.

  • Learning: what is more valuable in business terms, measuring training completions or measuring changed behaviors based on the training?
  • Payroll: what is more valuable to the organization, calculating how many zip codes employees live in or calculating how many have benefits and how that number trends over time?
  • Employee relations: how about this? Should you measure the number of sexual harassment complaints or how many disagreements you mediate between supervisors and staff?

Here’s the twist. I could easily make the case that any of these could be valuable in specific circumstances. But if you are truly looking at how your training is changing the organization and making people work smarter, then completion information just isn’t enough to do that.

The thing is, many people just gather data without any idea of how to use it. Your needs are different from those of every other organization, so something others might ignore could be incredibly valuable in helping your employer meet its goals and vice versa.

Think about the information you gather and report. Is it truly impacting the business, or is it just a “we’ve always done it” kind of activity? When I think back to the data I reported on at my last job, some of it was valuable, and some of it was a complete waste of time. And it was rarely used for decision-making, which made it doubly painful.

For instance, I had to regularly report on turnover numbers, but we never took the time to review them by team or functional role, which might have given us some insight into what was driving turnover for those specific positions.

We need to be thinking about what we gather and report on more critically. Stop gathering data just for the sake of it. Start with a purpose in mind before you piece together the first bits of information, or “begin with the end in mind,” as Mr. Covey would say.

Hope that helps. Lessons learned from someone who did it the wrong way the first time around. :-)

Sold Out: A Lesson on Event Content (and the Future of HR)

This summer at SHRM I was looking through the sessions in the app in an attempt to figure out which I wanted to attend, and I saw this one right up front.

SOLD OUT – #707: HR Metrics that Matter: The Process of Developing a Business Scorecard

It made me stop and think, especially in light of some of the conversations I had with others at the event about what sort of content was being offered. For instance, one session at the event was focused on the usual “top ten ways to avoid legal trouble this year,” and it had packed out the entire room and the overflow area as well. I’ve always had trouble with those types of training on the supervisory side of things. Why? Because it makes us focus on the negative aspects of our work, how to avoid getting “in trouble,” and makes us seem more like a nanny in the workplace than a trusted resource for managers/employees and a key business leader.

Policies vs. Actual Contributions

I’ve always had a love/hate relationship (mostly hate) with policies. I think we should take more time to coach and support than regulate and demand. Yes, there are times that come when we must make a rule, be the bad guy, etc. but it shouldn’t come on a daily basis. I recently shared Alison Green’s comments on how managers can have a good relationship with HR. The comments on that blog post when she linked from her site are pretty standard, and yet they still hurt those of us who see ourselves as good and helpful business leaders (instead of merely being the “no, you can’t do that” department).

Going back to the original intent of this post, I was glad to see the metrics session being sold out. Why? Because it’s something that we can do that is not just about being sued, covering our company’s butt, or some other litigation-related idea. Even small companies have the ability to gather and use data in a meaningful way.

In my opinion HR pros who make decisions solely on laws and what the handbook/policies allow aren’t making much of a contribution to the organization. It’s those that take the initiative to find ways that they can contribute in a more meaningful way, offer advice and flexibility that pushes the boundaries, and don’t say, “No” to every request that comes in (even if they are a little bit scary).

A Shift to PositiveHR?

It gives me hope that our philosophy as a profession is changing. SHRM and other organizations will continue to offer these “how not to get sued by your employees” sessions, because there is significant demand for them. But over time, I hope to see us focusing more on the other end of the spectrum. There’s even a group of my friends that started this #PositiveHR movement on Twitter, because they believe that we have the opportunity to do great things if we are truly positive and not self-defeating at every turn.

I do understand that there is a natural maturity curve as well. Smaller organizations or those with inexperienced HR pros will drift toward the legalistic side of things, while organizations with more radical HR pros will seize opportunities to focus on engagement and other positive things we bring to the table. It just seems that many organizations (and HR pros) are reluctant to move beyond the legal side of things. Is it because it offers them more power inside the organization? Is it because they need to feel more intelligent/informed than their peers? I’m not sure…

What are your thoughts? Are we still mired in this world of legal issues or is there a chance we can more into more strategic areas of impact? 

The New Recruiting Metric: First Year Retention

As HR is increasing its presence as a strategic part of the business, key performance indicators, or KPIs, are becoming a key part of the language for discussing how it is actually performing. Recruiting, in some ways, is actually easier to measure because it is very similar to sales: you either have results or you don’t. Today I want to talk about first year retention, a measure that I believe is going to continue to grow as a recruiting metric, even though many companies wouldn’t consider it even remotely linked to recruiting as of today.

recruiting kpiWhen I realized the link from retention to recruiting

Several years ago I ran into the wall. Figuratively, that is. I was spending about 50% of my time processing termination paperwork and 49% processing new hires. The other 1% was spent wondering just how we were going to sustain this churn. We were turning over about 50% of employees in positions that made up 90% of our workforce. In a company with more than 600 employees, you start to get the picture for just how bad things were. Like I said, my entire job was dedicated to moving the people into and out of the organization.

So I decided to try something. I gathered information. I pulled five years of archived files and noted termination reasons along with tenure and manager information. I looked into our Stone Age HRIS and pulled the same items for more recent terms. Once I had amassed the data, I started analyzing. I quickly identified a few key trends and highlighted them in the report I developed.

A few days later I presented my findings to the VP of HR, demonstrating through the data that approximately half of those terms not only happened within the first year, but within the first 90 days on the job. We were spending hours recruiting, training (each employee received over a dozen hours of training before starting work), and coaching these people, only to have all of that effort wasted. The data showed that if an employee made it past the 90-day mark, they were significantly likely to stay for a year or longer.

This is when I realized that recruiting has a very strong link to retention, especially first year retention.

[Check out: What it’s like to be a recruiter]

First year retention, examined

When we think about retaining employees, a more senior staff member might come to mind. We automatically assume that if someone took the job just a few weeks ago that they are going to be excited and engaged for months to come (hint: the honeymoon period). Well, that depends on several things, including the recruiting process. Here are the ways the two are linked:

  • Realistic job preview-during the recruiting process, an accurate picture of the job must be depicted at every stage (job ad, phone screen, interview, etc.) If not, the candidate might get a more rosy picture of the position than is actually accurate, which leads to frustrations on day one. People are quick to skim over areas that might be bothersome for them in the leap to a new company–it’s critical to show the good, the bad, AND the ugly to provide a full understanding of the job and what it entails.
  • Manager engagement in the hiring process-having managers who not only join in the selection process, but actually lead it, is key. Managers who develop questions to probe candidate abilities and fit ultimately pick better people than those who use a stock list of “what is your greatest strength” type questions.
  • Team engagement in the hiring process-a great way to help people feel like they have friends on day one? Let their team interview them. When I have done this I request that they ask some technical questions, but that they also focus heavily on fit: does the candidate gel with the existing workers? Are they similar in terms of values and passion? How have they felt about coworkers in the past? If a person feels like they have friends at work, they’re more engaged and less likely to bolt a few weeks later.

[Check out: How one of the best managers I’ve ever seen engages new hires from day one]

The future of recruiting metrics

In the past and still today, recruiting has been focused on some very surface level items: mainly time to fill and quality of hire. If we’re solely looking at those numbers, I could have phenomenal time to fill and quality numbers, only to have them dropping out of the workforce a few weeks or months later. Using a metric like first year retention as a recruiting metric provides a more well-rounded picture of just how well it is actually being performed. And it also brings a long-term, holistic view to recruiting.

What recruiting KPI’s does your company use? Are they working? What do you think of first year retention as a metric?

Analytics Driven by Business Accountability

Analytics in the business world serve many purposes, and a survey by the American Management Association uncovered the top five reasons business leaders say analytical skills are necessary today.

Which of the following create the greatest need for analytical skills in your organization?

  1. Accountability for results 67.0%
  2. Competitive environment 61.6%
  3. Complexity of business environment 52.6%
  4. Increase in customer data 51.3%
  5. Risk management 50.7%

business analytical skillsI found the results intriguing, because while we say we need accountability first and foremost within our organizations, many leaders often do a poor job of actually communicating that need. Oh, they’ll tell people they need to be accountable, but when it comes down to time to measure performance, they’ll think about things that don’t really tie into accountability for results. Having analytics to drive those sorts of decisions will be a positive overall; however, it will also mean that leaders and managers can no longer rely on other unimportant “measures” of performance.

  • Bob has been in the office for fifty or sixty hours a week for the past few months. He must be doing a good job. [Is it possible that he’s just horrible at managing his time/workload?]
  • I know she doesn’t write well, but Mary responds to emails 24 hours a day, 7 days a week. She’s really dedicated. [If she’s not sending out the right message, maybe “number of emails sent” isn’t a good measure of her performance?]

In some positions, it’s relatively easy to measure outcomes (sales, for example); however, in others it’s more difficult. For instance, how do you tell your administrative assistant to be “nicer?” Can you quantify that? How do you get an engineer to work “harder?” Those subjective measures are a pain for managers to enforce and a pain for employees to have to ascertain. You need to give them some actual targets to strive for that they understand.

ROWE me, baby

I had a discussion recently with some friends about the ROWE (results only work environment) movement, and it was quite an interesting conversation. A ROWE is a workplace where you work when, where, and how you want, as long as you meet your business objectives/goals. It sounds nice, and I love the idea, but it’s not necessarily easy. The key to making this work is holding each person accountable not for how many hours they log in the office, how long their butt is in the chair, or how long they are logged into their work computer; it’s about the results they accomplish. Again, it sounds like an excellent idea, but managers quickly become anxious at the thought of removing some of the traditional barriers and measurements for employees, even though in the long run the focus is to get employees to focus on the one thing that actually matters: results! This conversation keeps leading me back to accountability, and I’d like to share a few resources with you on that front in case you, like those who answered this survey, are interested in moving toward a culture of accountability.

4 accountability examples, ideas, and suggestions

  1. How many times have you heard a leader in real life or fiction demand: “I don’t care how you do it. Just get it done!” Many times, organization charts and job descriptions push people to perform a set of tasks. This mindset leads people to believe that if they perform their functions they’ve done what they’re supposed to do, whether or not the result was achieved. Effective leaders operate on the premise that their people must focus on achieving results. They lead and inspire them to pursue results by creating an environment that motivates them to ask, “What else can I do?” over and over until the results are achieved. They manage their people so that their “job” is to achieve results. Each person’s daily activities must be in alignment with the targeted results.
  2. In the book Turn the Ship Around, we learn about David Marquet and his attempt to remove the leader/follower model from the operation of the submarine he commanded. When he first took command of the ship, nobody was held accountable for anything, which correlated with the ship’s poor performance record. He began taking steps to give people accountability and oversight of their own areas, freeing him up to be a commanding officer instead of a 24/7 manager of minute details. It’s a great book if you are interested in seeing how other leadership/management approaches work.
  3. Several years ago I wrote about asking better questions to get better results. It’s still one of the most popular pieces, and for good reason. People are hungry for ways to help drive accountability within their organizations, and simply asking different questions is an easy way to start moving into that sort of mindset. More here: Asking Questions at Work.
  4. Adrian Gostick and Chester Elton often talk about the data that drives great companies and great teams. After researching extensively, they developed a model that described how the best managers led their teams. The key elements? Goal setting, trust, communication, recognition, and accountability. So not only is it something that helps on a personal level, it also helps managers to get the most out of their teams! More of this found in The Orange Revolution.

 Wrapping up

Back to the study, I would be interested to hear your feedback on some of these items. Do you see any of these five areas playing a part in a need for analytical skills within your organization? Why or why not? What drives accountability in your organization? Is that driver toward an accountable workforce actually getting results?

Big Data for Small Business

Last week a friend called me for some help. He’s working on some 401k reporting requirements, and the data the provider needs from him is fairly detailed. In prior years, we could have pulled some quick reports from the accounting system and gotten everything plugged in after some love sessions with a keyboard. However, the newly implemented accounting/recordkeeping system seems to think that actually running reports and gathering data insights is a “nice to have” versus a “must have.”

This got me thinking pretty hard about the importance of test driving new solutions before settling on a provider. If the selection team had been aware of the flaws in the system, including glaring ones where people can’t get data reporting that they really need, then they might have chosen another tool entirely.

As it turns out, there is limited reporting functionality, but it’s so incredibly complex that only one person is able to accomplish the task, and that’s only after an hour or more of trial and error. Yeah, not very efficient.

The economist says

If you’ve been around here for a while, you probably know that I like the Freakonomics podcast. I’m an economics nut, and I always thought if/when I got my master’s degree that I might like to teach economics as an adjunct professor. Yeah, livin’ the dream! :-)

Anyway, in a recent show, the two economists were talking about making business better, big data, etc. One of them, Steve Levitt, consults with different organizations to solve business problems. He mentioned that until he actually got into the businesses, he never realized that the problem of big data, analytics, and actually getting actionable information out of existing data would be driven (or limited by) the IT infrastructure.

That comment, combined with the experiences above, are probably a reality for many of you out there. Thinking back, I used Excel as my HRIS for some organizations, because we were too small to need anything else. That didn’t really allow for analysis or anything fancy–it was just a recordkeeping system.

MINOLTA DIGITAL CAMERAPayroll runs the show

Now there are providers out there that offer services to small companies to help them transition away from spreadsheets to a cloud-based system for HR needs, but many companies, especially smaller ones, wouldn’t want to have an HR system and a payroll system. That decision is usually driven by payroll, since that’s a critical business task. For many smaller organizations, keeping the HR records straight isn’t considered that critical. There are a few reasons for that:

  • HR is usually carried out by a non-HR person in really small organizations
  • Even when the company has an HR person as they grow, the compliance requirements still aren’t too difficult
  • Payroll is more important than virtually every other internal business activity (don’t believe it? Try not doing it once and see what happens…)

Big data, little data

A few years ago I worked for a company with about 600 employees, all located within 100 miles of the corporate headquarters. The company had a problem with turnover. Majorly. We weren’t food service or anything like that, and yet we had approximately 50% turnover year after year for as far back as I could find records. So I decided to try to get some insights into what was going on. I snagged the data from the past five years, dumped it into a spreadsheet, and started manipulating the information.

Within a few hours I had some great insights that pointed toward the problems, and I crafted a few potential solutions to help ease or even solve the problems we were facing.

When I presented my findings, I was told, “You didn’t have time to worry about things like that. Go process your 25 terminations and 15 new hires and leave this alone.”

In my example, we had the data and the potential solutions, but we lacked the one thing needed for action: leadership support.

Closing thoughts

I don’ t know that we broke any new ground here today, but I’ll leave you with a few takeaways from my perspective:

  1. If you’re looking at a system any time soon, run it through the paces that you’ll have to in your daily work. It’s important to know now the limits before you’re in the thick of things and trying to do something the system simply can’t.
  2. If you’re watching all this “big data” talk and thinking that it’s for larger organizations, it can certainly be implemented, even if on a smaller scale, at organizations with fewer people.
  3. Get the support of your leaders early. I think one of my mistakes was presenting the data without creating a need for solution first.

Strategic HR: Measuring Quality of Attrition #SHRMTalent

It’s day two of the 2014 SHRM Talent Management conference, and I attended a great session on Quality of Attrition: Management's Favorite Human Capital Metric. The bottom line is that we know that every person that leaves the business is not the same. Why they left, how valuable they were, and what the organization could have done to change the results are all elements of attrition quality that can (and should, arguably) be measured.

So who’s doing it?

According to data from i4cp, high-performing companies are more likely than low-performing companies to measure various factors relating to employee attrition. In fact, 85% of high performing companies measure factors such as voluntary/involuntary attrition, whereas low performers only measure that data approximately 70% of the time. Continue reading →