HR Metrics: Where to Start – HR Business Partners (Part 1) - bettHR

This is part two of our HR Metrics: Where to Start series. You can find part 1 here.

Now on to the meat and potatoes of the types of metrics you can track… even if your larger HR organization isn’t quite ready to implement these metrics. This is how you, as an HR business partner, can elevate your performance and justify your HR activities to the business. Ready to get started?

HR Business Partner Metrics

There seems to be an endless number of metrics you can track, or perhaps you feel as though there aren’t any that would accurately represent the work that you (and your HR department) do. It’s a hard place to be stuck – but remember, this is your differentiator. This could be the differentiator that pushes YOU to key talent status, or at a minimum, helps connect the business to your HR activities.

To start, here are some metrics you should be tracking:

  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

Unfortunately, unlike Talent Acquisition metrics, many of these items are not in place or will take you some time to set-up to track appropriately. Not to worry – setting these metrics up will not be an ongoing pain point.

HR-Related Goals

It should go without saying, but most of us simply don’t do a great job at tracking HR-related goals, whether they are the goals we own, or the goals owned by the larger HR department. That is the first thing you need to implement today!

If the business thought that your HR-related goals were worthy enough to make them your key initiatives for the year, then you must track your progress towards them – this isn’t optional. Since your HR goals tend to be different year-over-year, you will need to create a new metric to track for each goal. However, remember that we are tracking for “hard data” and also accomplishment towards the goal… and how it impacts the company’s bottom line.

Let me use an example to show you how to craft your own metrics for your HR goals. Let’s say your HR organization had this annual goal: Complete 100% of performance reviews by June 30.

With this sample goal, even though you alone are not responsible for the entire goal, you are able to track this for your own area of purview, even if it’s not the entire HR organization. Your metric for this goal would be: tracking the completion rate for the employee population you support. You can even go deeper and track for different levels within your organization.

  • XX% collected completed performance reviews which would be calculated by # of employees completed / overall # of employees x 100 = XX% completion metric
  • Advanced metric:
    • XX% collected completed performance at VP level
    • XX% collected completed performance at director level
    • XX% collected completed performance at manager level
    • XX% collected completed performance at individual contributor level

Perhaps your HR-related is a bit “softer,” and you’re unsure how to create a metric for it – something like “enhance employee engagement” or “increase HR awareness.” The best way to create a true metric from even softer goals, is to create the thread from the goal to the business impact.

Start by asking, “Why is this goal important enough to the business’s performance for you to carry it for the year?” And keep asking why until you’ve landed at what drives the goal you have.

I’ll be tackling employee engagement below, but for the “increase HR awareness” sample above, I’d dig behind this goal. Why is this important for the business? Here’s that train of thought:

  • HR is being left out of the loop for business decisions 
  • When HR is not a part of business decisions, activities are not vetted through compliance or policy
    • Outcome 1: The company leaves itself open for lawsuits
    • Outcome 2: Changes are not managed through a “change management” process
    • Outcome 3: Culture and engagement is negatively impacted, resulting in higher turnover and not retaining key talent

So from the three outcomes above, and there are many more, what makes the most sense from your knowledge of the business, for you to track and report on? That is the metric you should create and track for your softer HR goal.

Retention Rates

This metric may be tracked through your HRIS database or if manually (only if absolutely necessary). Essentially, retention rates show you the health of the business and areas where HR may need to step-in to research what’s going or take immediate action. Retention rates can be highly… debated, depending on your leadership and the business.

Regardless of that debate, it is an important way for you to keep a pulse on what’s going on within the departments you support. I cannot tell you how many times an unusually high retention rate has been an indicator of a terrible manager that needs some coaching or corrective action. And conversely, great retention rates should be studied and reviewed for best practices.

If you are unfamiliar with what “retention rates” means, here’s a quick definition: it’s how many employees you want to stay, stay at your organization.

What you’re tracking is how many people resign or leave by choice (voluntary terminations) – not including the number of people fired.

What can be debated in certain companies, is if you include “poor performers” in the voluntary rate and what happens to employees who are RIF’d. Our take on it is this: poor performers should be included if they voluntary left, as you didn’t take any corrective action to remove them as involuntary terms. For RIF’d employees, they should not be included in your retention rate as they do not voluntary leave the organization.

Retention Rates are calculated by:

  • # of voluntary terminations / overall number of employees = number then 100 – number x 100 = % Retention
  • If you prefer to show “turnover rate” instead of employees retained you would: # of voluntary terminations / overall number of employees = number x 100 = % Turnover
  • Advanced metrics (by level and/or department):
    • XX% retention rate at VP level
    • XX% retention rate at director level
    • XX% retention rate at manager level
    • XX% retention rate at individual contributor level

Stay Tuned

The next two metrics: Employee Engagement – scores and activities and Breakdown or inventory of your strategic initiatives, will be evaluated in part 3 of this series. Stay tuned!