CFO, the magazine for financial executives caught my eye with an article on HR Metrics. The article started me thinking. My first thought was “What do CFO’s know about HR metrics?” My second thought, “Why are we in HR waiting for CFO’s to tell us how to justify our jobs and functions?”
The article made several key points.
First, HR metrics usually fail to connect employee performance to corporate performance. HR likes to measure turnover ratios, cost and time to hire, cost of onboarding, etc. The author was right, very few HR Departments track how well the people hired actually perform, much less how to identify what the traits and skills are that contribute to superior, measurable performance.
Second, the author asked “If employees are “the company’s most important asset” as HR executives oft proclaim, why isn’t that asset being coolly assessed like any other?” CFO’s are starting to ask HR Departments to “Give me something that will impact quarterly results now.” That’s a polite way of saying “HR, justify your existence.”
CFO’s are paid to plan for the unexpected. This recession caught many people by surprise. CFO’s have learned from it. Now they are asking HR Departments:
1. What type of employees will our business need 18 months from now?
2. Specifically, what is HR doing to assure we have those employees?
3. How is HR measuring the contribution from each employee that HR helps us bring into the organization? How is HR using that information during the recruiting and interviewing process?
Jump Start the Process (Get ahead of the curve by being proactive. Don’t wait.)
Here’s a start on a quick questionaire HR can circulate to each Department. Use this if you like, but you can do better. Take these ideas and expand or customize them for your property/company.
A. What skills will your Department need in the next 18 months that your employees currently don’t have?
B. What is the annual turnover in your Department?
C. What are the three major reasons people leave?
D. How can we in HR help you reduce the turnover?
E. How are you measuring the productivity of each employee? Any tips on how we in HR can better identify candidates with the skills/traits that assure increases in your productivity.
There are many more questions that could be asked. Start with no more than 5. You’re looking to open a dialogue. Not all Departments will respond. That’s good, most HR Departments are small and couldn’t easily address everyone at once. Should you be lucky enough to get responses from all Departments, you will find a number of common issues that will cut across all Departments.
To Grow and Succeed in HR
-Start thinking and identifying ways your HR Department helps boosts productivity. Do the metrics you track mean anything within the overall organization?
-How HR helps to indisputably sharpen your companies competitive edge.
All business, worldwide, need to identify how to get more production from each employee. Significant labor shortages are starting to occur in every country in the world, including India and China. Every business has to carefully and critically examine the production from each employee. HR plays a very key role, but historically, HR has done a very poor job selling the value of our services.
