3 Types of HR Metrics in People Analytics

and why not all of them matter.

Hey, everyone,

I have just received my second dose of the COVID-19 vaccine.

Finally!

Although I did not personally experience any side effects, my partner did. I grew curious about how common the side effects really are.

Here is an article with some metrics:

1. Side effect probability after the first dose of BNT162b2 (Pfizer) is 13.5%

2. Side effects probability after the second dose of BNT162b2 is 22.2%

3. Side effects probability after the first dose of ChAdOx1 nCoV-19 (AstraZeneca) is 33.7%

These data are cool.

They tell me what I can expect as a member of Team Pfizer or Team AstraZeneca.

As a second-time Pfizer user, I know my likelihood of developing any systemic side effects is about 1 in 5 people. I can decide on whether I want to brace for the impact or keep going about my day.

I braced for impact. Though, I probably should have gone about my day as usual.

But the more important question is:

Why the hell am I talking about side effects in the strategic people analytics letter?!

The reason is side effect probability is a metric.

And metrics are what I want to cover today.

HR and Talent professionals looooove good metrics.

We make up metrics every week because we think they all matter.

In fact, some consulting firms have a library of more than 200 metrics, which include metrics such as turnover, attrition, retention, and eNPS.

As well as other, less familiar metrics, like Value Added by Human Capital and the Change in the Number of Coaching Conversations.

200!

Think about it for a moment.

Most of these metrics assess three things:

1. How well does the organization function overall?

2. How successful are our programs?

3. How is HR a contributor to the success of the organization?

How well does the organization function?

The most important question for the board, the C-Suite, and the stakeholders at large.

The metrics here really include three things:

1. Headcount Metrics (e.g., headcount, retention)

   • Do we have the right number of people to achieve our strategic goals?

2. Engagement Metrics (e.g., eNPS, engagement)

   • Is our workforce motivated, willing, and engaged to achieve our strategic goal?

3. Performance Metrics (e.g., revenue/FTE, quality of hire)

   • Is our workforce productive and able to achieve our strategic goal?

That's it.

Looking at this list and seeing everything in green on a dashboard tells us we are doing well. Seeing at least one of the metrics in red tells me we are not doing so well.

In fact, these metrics are prominent because all of the other metrics lead to these metrics.

All programs need to result in positive headcount, engagement, and performance.

All HR contributions should result in headcount, engagement, and performance.

If you can measure a few things, these are the things you should focus on.

In fact, if you are not focusing on these things, what are you doing?

How successful are our programs?

The second set of metrics looks specifically into the programs HR/Talent departments roll out.

They focus on answering one question:

• Is the program effective?

For a Learning and Development (L&D) Program, you can consider things ranging from Satisfaction with the Learning Program to something like Change in Performance after L&D Program.

You can adopt metrics focused on changes in the Employee Engagement Rates and Change in Long-Term Disability Claims for a Wellness Program.

For the Diversity, Equity. and Inclusion (DEI) Program, you could take a look at things like Percent of Higher Degree Employees or Churnover (Internal Movement Rate).

All of these metrics are specific to the programs and assess how good the program is.

They are local. They are focused. They are precise.

All of the program success metrics look to assess whether the program is good enough to stay or if it should go.

Here, of course, you need to ask yourself whether these metrics are connected to headcount, engagement, and performance fundamentals. If they are not, why do you measure them?

How is HR a contributor to organizational success?

Ironically, this set of metrics is my least favourite.

But not because these metrics are all bad.

There are some good metrics in there.

The main reason is not many can be calculated consistently to estimate the actual impact.

Yes, you can estimate the impact of changing your vacation policy in real dollars.

But things like the cost of turnover are just estimates based on arbitrary criteria of people who think about these things.

People like me.

And, people like me make assumptions.

Hence, when you know the assumptions I am making, you will see they are reasonable but imprecise. With lower precision of the components, you will end up with a lower precision of the estimate.

It's like travelling at sea. If you are one degree off course initially, you can end up being 60 miles away from your destination.

In all, remember...

Garbage in, garbage out.

I will leave you with one thing.

Use metrics sparingly.

And ask yourself:

• Do I really need to measure this? Or, would I be better off focusing on a few more important things?

Ciao,

K

P.S. Interested in learning more about people analytics? Check out my upcoming course and sign up to be the first to know about the launch!