Welcome to episode 33 of the Rethink HR podcast, brought to you by bettHR.

In today’s episode, we discuss four metrics to start with, if you are an HR business partner or generalist, along with the calculations for each. These metrics are important for you to show the connection between the great work you do every day in HR and the company’s bottom line, showing an ROI.

Here are the suggested HR business partner metrics to start with:

  1. HR-Related Goals (and brownie points if you track towards company-wide goals)
  2. Retention rates for your areas of support
  3. Employee Engagement – scores and activities
  4. Breakdown or inventory of your strategic initiatives

If you want to get the free guide to help you get started tracking HR metrics, click the image below.

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Melissa Anzman (00:00): Is showing the story, the real story behind the numbers, and they provide you with that quantitative measurement to help you move from being a tactical partner, into being a strategic trusted advisor.

Melissa Anzman (00:16): Hi, I'm Melissa Anzman - an HR practitioner turned CEO of a thriving employee experience company, but it wasn't all that long ago that I worked as an HR business partner responsible for increasing employee engagement at companies nationwide. And I struggled to move the needle, even after trying everything under the sun. Fast-Forward past many fail tactics and lessons learned, and you'll see how I've been able to crack the code and replicated at companies of all sizes for creating true engagement and doing HR work that matters work that changes the lives of leaders, HR professionals, and employees. By focusing on the employee experience, I created the rethink HR podcast to give you actionable step-by-step strategies to help you make an impact.

Melissa Anzman (01:01): If you're an HR leader or one on the rise, who's looking to stop spinning your wheels, doing the same tired activities that aren't driving results, or you want to have a career. You love you're in the right place. Let's get started.i.

Melissa Anzman (01:15): In today's continuation of our HR metrics, how to get started series. I'm really excited to talk about four metrics for you to start with if you are an HR business partner. So an HR business partner is the person who interacts with HR and their client groups. So they are the one providing that,umajor support, strategic direction. You can be called an HR generalist, an HR manager, a director, VP, et cetera. The point here is, is we're partnering with the business and the company where that intermediary to watch out for our people. And of course, you know, I'm going to always bring it back to the employee experience.

Melissa Anzman (02:04): And so today I want to share with you these four metrics because metrics are not just for recruiting. Like we talked about in episode 32 or for the HR analyst or for co benefits and compensation, HR business partners can and should be creating and tracking their own metrics. So these four metrics again, are suggested the metrics that you track for your own company is going to vary because it has to be relevant and important for your company. And if you're not sure how to do that, you want to start with the employee experience framework. So I advise you revisiting that or take a look in the employee experience solution book, to understand how we figure out what's important for the company, because we need to make sure that we are tracking, measuring, and then improving only those items that are going to improve the overall employee experience versus just reporting on metrics or numbers or creating analytics around things that we think we should be tracking.

Melissa Anzman (03:16): So with that in mind, there are endless number of metrics that you can track and probably should track. But I want you to start thinking about metrics any smaller way, especially if you're a newbie or you're not a math person or a numbers, make your eyes cross, whatever that is. I want you to start small, which is why we're going to talk through four different metrics to begin with. So those metrics are number one, related to your HR goals. Number two, retention rates for the areas that you support. Number three, employee engagement, scores, and activities, and number four, a breakdown or inventory of your strategic initiatives. So on surface, you probably know what these mean at a high level, but what I wanted to help you walk through is how to create those actual metrics in these four buckets going forward. So the first one, your HR related goals, now it should go without saying, but most of us simply do not do a great job at tracking our HR related goals, whether they're goals that we own, or the goals owned by that larger HR department that we roll into.

Melissa Anzman (04:34): And this is the first thing we need to implement today. And yes, I know your HR goals are likely not amazing. And you probably only revisit them once a year, when you have to do your annual performance reviews or something like that, I'm not looking at you, am I, I am. But if we have these goals and they are told to us as being important to improve the employee experience, then we have to create metrics around that. Because if the business things that your goals are worthy enough to make them your key initiatives for the year, that's the point of having those annual goals. Then we have to track our progress toward them. It's not an optional thing. Now, since goals are something that unfortunately, maybe fortunately, depending on your view, we only look at once a year and they tend to be different year over year.

Melissa Anzman (05:31): You're likely going to have to create new metrics to track for each goal on an annual basis. However, I want you to remember that we're tracking for the hard data and can then also show accomplishments toward the goal and how most importantly it impacts the company's bottom line and the employee experience. So I want to use an example of how you can create your own from your HR goals. So let's say your HR organization had an annual goal that said complete a hundred percent of performance reviews by June 30th. Now with this sample goal. And I have to tell you, this is a goal that I actually used to carry back in the day. So with this goal, even though you are not responsible for the entire goal, because you do not support a hundred percent of the organization, you are able to track this goal for your own area of purview, the areas that you support your team within HR and so on, even if it's not the entire HR organization or more broadly the entire corporation.

Melissa Anzman (06:39): So you're going to use your magic for this goal is going to be tracking the completion rate for the employee population that you support and or directly manage. And then you can take it even deeper if you want to be advanced and track for different levels within your organization. So you want to maybe track, okay, if you support, let's just say marketing, and there are a hundred people in the marketing organization. You want to add a minimum that first metric you want to track how many people out of the hundred is, has already completed their performance review. Now the advanced level is of those hundred people within marketing. There's maybe five different levels. So maybe there's an assistant, a associate, a manager, a senior manager, and a director. So those are five levels. So then you can break it down by level, still track completion rate, but instead of for the whole organization, you're tracking by level.

Melissa Anzman (07:40): So you can see where those levers are a bit more easily. So that is the first one that you want to do. Now, as we look at it, how we create the metric is we want the percentage complected completed performance reviews. So that would be the number out of the total number within that organization. So it's pretty easy here. We're going to take the number that is collected. That's going to be at the top. We're going to divide it by the number of total employees. And then we're going to multiply that by a hundred to get our percentage completion metric. And for the advanced metric. It's just the same thing. We're just using a lower denominator because we're breaking it down by level. So perhaps your HR is a bit softer. Your HR related goals are a bit softer and you're unsure how to create a metric for it.

Melissa Anzman (08:38): Maybe that goal is something like enhance the employee engagement or increase HR awareness, both goals I've seen and both which are by the way, atrocious, please don't use goals like that. There's nothing exciting about that, but the best way to a true metric, even from goals that are a little softer or as I call them full offi the best way to do that is to really pull the thread from the goal to the business impact. So we're going to start by asking why is this goal important enough to the overall performance of the business for you to carry it this year? And I want you to say so what so and so what until you've landed at what drives the goal that you have. And I talk about this often when it comes to employee engagement surveys, because sometimes when we ask something, it's not clear why it matters.

Melissa Anzman (09:35): So we're going to do the same thing here. If your goal was to enhance employee engagement, what I would say is, okay, what does that mean? Why is it important? Why does the business care about it? And when I have that answer, I'm going to say, but why does that matter for the bottom line? And when I have that answer, then I can sort of still start to uncover something I can measure. And maybe for our company, the reason is, is that we know that engaged employees are staying longer, or we know that engaged employees mean that our employee experience is better. You know, I love that one best. And then I can measure things about the employee experience,uor things about staying power of your employees. So if it's a bit softer, don't skip it. I want you to try and pull the thread to create something that is measurable and meaningful for your example.

Melissa Anzman (10:28): So let me give you just a little bit more detail around that versus EG. So what, so what, and so what, so if, if the example is one of the ones I created, the other example of the increased HR awareness, the reason behind it, I would pull the thread. And sometimes you have to guess, like, I hate saying that, but this is you doing the work to dig behind it, versus what's just stated. So here's that train of thought I would go along. So HR awareness needs to be increased because HR is being left out of the loop for a lot of really major business decisions. Well, why does that matter? Well, when HR is not part of the business decisions, activities are not vetted through our compliance or policy or employee experience framework. So what happens when that happens? Well, number one, we have, we're opening ourselves up to lawsuits.

Melissa Anzman (11:19): So that's a metric I can measure. Number two is that changes are not managed through a change management process. I can measure something around that or outcome number three, is that the culture or engagement or the experience is negatively impacted, resulting in higher turnover rates and not retaining key talent. And those are two or three different metrics I can create from there. So this is how you would just simply pull the thread to understand why you're important, why that goal is important and how you can actually measure it. So the second metric to measure, ms an HR business partner, if you're not sure where to start is retention rates. Now this metric can absolutely be tracked through your HR, m system or your database or your Excel document, if you don't have anything else, but essentially your retention rate is going to show you the health of the business, an areas where HR may need to step in to research what's going on or take immediate action on retentions rates can be highly debated depending on your leadership and the business.

Melissa Anzman (12:33): And what I mean by that is whether or not you want a high retention rate or a low retention rate. Now for definition sake, retention rate means how many employees that you want to stay to be tracked through your HR S system or your database or your Excel document, if you don't have anything else, but essentially your retention rate is going to show you the health of the business and areas where HR may need to step in to research what's going on or take immediate action on retention. Rates can be highly debated depending on your leadership and the business. And what I mean by that is whether or not you want a higher retention rate or a low retention rate. Now for definition sake, retention rate means how many employees that you want to stay at the organization are actually staying at the organization.

Melissa Anzman (13:33): Now what we want to track, because these are people we want to stay is we want to attract people who resign or leave by choice, which are called voluntary terminations, not including the number of people fired. Now, when you have layoffs, that is still an involuntary termination but you have to determine as a company, if you want to track that retention. And what I would personally recommend tracking is involuntary termination of key talent. That's, what's really important because we want our key talent to stay. And if we have to lay them off, we want to understand that impact to the business. So involuntary terminations are things like people who are being fired, which we want to track just to see that. But we don't necessarily worry about that from a retention rate perspective, because we don't want to keep underperformers, but when it comes to the other side of involuntary, those layoffs, where the business mandates us having to let go of people, we do want to see the impact overall to employees, particularly our key talent.

Melissa Anzman (14:46): And listen, it doesn't hurt to also just track in voluntary terms as a whole or layoffs as a whole, if he'd like to do that, but I want you to start small. So that's why I'm getting really granular here. Now, why this is debated. The whole point here is we want to understand what's going on within the departments that you support and what, what it could mean is if we have an unusually high retention rate that means that maybe the people who are staying love their manager and conversely, the opposite is true. Okay. So we want to really understand how many people we are retaining, how many we want to. And then we can talk about what it means for our organization and if we want higher retention rate or lower retention rate and all of that, but first we need to know the metric behind it.

Melissa Anzman (15:40): Okay. So the one other thing that I want you to just be aware of is certain companies,udon't want to include poor performers in the voluntary rate. So this is someone who may not have a high score in your last performance review cycle. And they're sort of seen as people that we don't want to retain until they are actually terminated. They are an employee. So don't skew your numbers unnecessarily by not including employees who are underperforming. Okay. So,uhere is how retention rates are calculated. So the top number is the number of voluntary terminations within the population you are looking at, okay. Then we're going to divide it by the overall number of employees within that population, and that that's going to equal your number. Then what we're going to do is we're going to take 100 minus that number that you just calculated, multiply it by a hundred.

Melissa Anzman (16:49): And then we have our retention rate. And that means that these are the number of people who are staying at the organization. Now retention rate is the converse of turnover rate. So turnover rate just means the people who are leaving. So if you prefer to show the number of people who are the percentage of turnover versus the number who have retained, what we're going to do is we're going to calculate it slightly differently. We're going to do the number of voluntary terminations on the top. We're going to divide it by the overall number of employees. And then we're going to take that result and multiply it by a hundred. And then we have our turnover rate. Okay. So same, same number, same calculation. It's just what we're showing either how many we've retained or the percentage that we have turned over and similar to the first metric, you can absolutely break this by level or department or what have you so that you can identify where things are working in your desired way, whether you're retaining the people you want or not or also understanding where you may need some turnover, or you may need some new employee blood in that organization.

Melissa Anzman (18:10): You didn't get into HR crunch now, but there's got to be some way for you to show the results of your hard work and figure out what's really working for your company and spatially right now, every HR professional today has to be able to identify what to track, how to quantify it and what to do with the results at better. We want HR pros to be able to leverage HR metrics, to do more great work for their people. Our goal is to help you track the right things in the right way, without relying on out of touch outsourcing or a one size fits all solution, HR metrics, one Oh one is designed to help you do just that it's a four week online course that introduces you to HR metrics, how to choose the right ones for you to track in your current role, how to turn numbers into stories and build a business case around what you've discovered.

Melissa Anzman (19:09): When you know your metrics, you can focus time on the work that matters by having a clear roadmap for your priorities. You can significantly increase your results across the board by boosting your efficiency and forgetting the days when you felt like you were throwing spaghetti against the wall. And you'll instantly raise your authority and profile at work and even more great opportunities will come your way to find out if HR metrics on a one can help you meet your goals and Excel in your role in HR text better two, four, four, two, two, two. Okay. So the third metric that you can start with is employee engagement, the scores and activities. Now I have feelings and thoughts about tracking employee engagement. I'll probably touch on them in this section, if you know me, but this is something employee engagement is likely a metric. You are already tracking on an annual basis and having your employees already participate in a survey that gives you results by a third party, or what have you.

Melissa Anzman (20:23): They want to know what they are. And so I want us to be sure that we are leveraging the information and data we already have versus having to start everything from scratch. However, the thing with employee engagement metrics is that there isn't a one-size fit method of creating or measuring them. There are many ways to achieve information and measure, but if you're simply just reviewing the metrics that are generated through the survey vendor and trying to increase engagement from there, you're missing the story behind engagement and why you haven't been able to move the needle thus far, because remember engagement is an outcome of how the employee experience is your company. So the employee experience, and for us to really do good work around employee engagement metrics for it to have real value to HR and others, we need to understand the story behind the measurement in your tracking and evaluations.

Melissa Anzman (21:26): And in this way, your scores are only one point of information from there. You're going to have to pull out the meat and potatoes from the information. So here are some ideas to get you started. And of course there is a bunch of information on employee engagement surveys in this podcast, the rethink HR podcast on so many episodes before. Okay, so first we need to understand what your company's actual engagement measurement is and why it's important for your organization. So using the standardized norm, that is the default for most vendors who like compare against industry or their overall clients, or what have you, it's likely not at all applicable to your organization or population. Instead, I want you to determine the top two to four areas that your organization deems as necessary to meet the business objectives and then focus on those areas. So when reviewing the questions prior to the survey, we want to understand if they all add to the story, you need to tell, do those questions, support those two to four main objectives.

Melissa Anzman (22:41): And if not, we're not going to worry about it. We're not going to include them in our measurements or create metrics around them because it's a perfect list. We don't need things and measurements that don't add direct value. And then we're going to do the same thing. We're going to dig deeper. And this is the hard part because it's simply easier to just share the no's and numbers that your third party vendor has given you. But we want to understand why. So as we dig into it, we're going to ask and see what the outliers are and why they're outliers. What impact do those outliers have to the overall organization? What trends are we seeing? What other HR related metrics is it popping up and maybe it's retention that's showing up, right? How does it correlate to other measurements? And remember the goal of the metrics is to show the worth, so to speak of what you do in HR.

Melissa Anzman (23:42): So we want to be sure that we're understanding the, why does someone care about this? So let's say for example, in your employee engagement survey, you're asking questions to see if employees have the tools and resources, they need to do their job. So I would start by asking, well, why is this measurement important to our organization? So some answers could be, our budgets are tight that it may make it difficult to decisions without the tools and resources. And conversely, do we even have a budget to improve it? If it's low in this area, are we not doing a good job at managing our budget in tools and resources for employees? Do we have a lot of turnover in more technical areas or other such areas where specific tools and resources are needed, is our tech a hindrance to the productivity of the organization?

Melissa Anzman (24:34): Do we have a high number of employee performance issues based on not being able to do their job? Like, I want to understand why this matters, if it matters for any of those reasons, or, you know, we look at that and we say, you know what? It really doesn't matter if it doesn't matter, we're not going to measure it and create a metric around it. But if it does measure, these are the things we're going to, if it does matter, excuse me, these are the things we are going to measure. Then there are so many possibilities of like why it could be important. And it's important for you to ask those questions so that you can tie back the right metric for the organization to see the results. And so here, here's how we would put those metrics in place using this example. If you want to know that employees have the tools and resources, they need to do their job because you have a high turnover rate in your technical engineering department, then I would create these metrics around your engagement survey, data metric, one overall engaged based on survey vendor.

Melissa Anzman (25:38): The second metric would be breaking down the list of engaged or satisfied, whatever word your vendor uses specifically in the technical engineering department and compare that number to departments that are less technical in nature across the organization. So you can get a real benchmark as to what's happening there. The third metric you can explore is the budget that is spent on the tools and resources for the technical engineering department over the past year or quarter, or what have you. And then you can do a comparison to other departments. And the last idea here for the fourth metric would be where are the gaps and how the budget spend is suggested. So just looking at, are we actually spending our money toward this, or are we not? And really understanding that, so your action plan here becomes really important because you're able to then measure your activities based on what we found, why it matters.

Melissa Anzman (26:43): So if it's, Hey, you know, we're spending less money on these, in this technical group when they have more resources, well, guess what, we can improve that and we can measure it. And we can show year over year year when we take the engagement survey, how our investment in that group specifically is going to increase in engagement for that group. Now, again, these are not instant results, right? Because if you're only doing your survey once a year, we have to remember that it takes some time and your big wins may not necessarily have an impact longer on, but if we're focusing on the right areas of concentration, and we're thinking about the metrics before we deliver the survey and understand what we really need to measure, we're able to create a lot better metrics that are more meaningful. Now, the fourth area for you to consider is how to break down or inventory your strategic initiatives.

Melissa Anzman (27:44): So in HR so much of our time can be spent doing tactical information. That strategic initiatives are sometimes left by the wayside or only focused on by the most senior people within HR. So as a business partner, though, being a strategic partner is critical in your organization's overall success. And to help you do this, you need to show the measurement behind the strategy, which can be difficult. So tactical day daily items are so much easier on the surface too measure because it's like tasks. I did this, I did this, I did this, here's the impact. But when we look at your HR strategy for the year, our department doesn't have a strategy. I want you to use the organization strategy and determine how you're going to actually achieve save them. So that strategy is that 30,000 foot view. But what your actions do is what your actions are to create that and implement it and accomplish it.

Melissa Anzman (28:44): That is what we want to measure. Those are how we create the right metrics and track them. So for your daily activities and your goals to roll up into the strategy and they likely do, because, Hey, we're doing work. That matters, right? If that's the case, you want to simply track your progress toward achievement, which you're likely already doing. But if your goals are not designed in that way, which likely you carry a few, you're going to, to need to put metrics that help support the higher goals. So essentially you're going to start with a strategy and your strategic initiatives, and maybe it's your employee experience framework, and then cascade the achievement down until you create smart goals that you can track. So for example, if your HR department, I meant wants your HR business partners to be more strategic partners, you'll need to create the tactical elements that will help you achieve that.

Melissa Anzman (29:42): So looking at your typical HR calendar, perhaps that means conducting to management review sessions talent management review sessions during the year, maybe it's creating metrics around employee relations, cases and issues. Maybe it's delivering management training, the leaders who need it. And so on when he wants to, to do is once again, pull the thread. And here's the thing, hopefully me saying poll the threads several times is going to help you create better goals for yourself at the beginning, because that's the problem. Our original goals are unclear, which is why we have to pull the threads several times to get the right metric. And in this case, that is very much true, but we always want to tie back our strategic initiatives to the work that we do in a daily basis. There should be a direct line in correlation to that so that we can show with metrics, the work that we do matters and exactly how it matters with the results that we are achieving. Now, as a reminder, these are just four metrics.