TM - April 2008 - (Page 32) recruitment & retention assessment & evaluation compensation & benefits performance management learning & development succession planning other business data to provide deeper insight. For example, instead of merely measuring turnover rates, an analytic approach would seek to capture additional data, such as the type of people who are leaving the organization, where they are going and which open positions are more important to fill faster. This information allows for a greater analysis of several different components of turnover and would help determine where reducing turnover could best improve business results and where to allocate scarce HR resources. who make hiring decisions to provide a rating of the quality of people who were extended job offers. With this type of metric, one could track perceptions of the quality of hire with the performance of the hire down the road to find out how accurate leaders are in identifying and hiring candidates who will succeed. Talent managers could find out how many of the top-rated candidates accept job offers and how many turn them down. Further, ask candidates who turn down job offers if they accepted a position with a competitor. This information can help HR leaders improve decision making. They can use data to identify leaders who need more training in how to identify successful candidates. They can determine the organization’s talent competitiveness by knowing how many qualified candidates accept job offers and how many are lost to competitors. Implementing this type of metric reinforces the hiring manager’s accountability for evaluating and selecting talent. Knowing this data will be reported could be a powerful motivator to change how talent managers approach staffing decisions. The insight and analysis gained from targeted analytics also can help HR leaders provide counsel to other executives on which talent issues impact the bottom line and suggest actions to improve talent decisions to benefit business operations. As long as HR is evaluating the right numbers, it will be the quality of data, not the quantity, that creates opportunities to use data to drive better decisions and actions. Collecting HR data metrics only is valuable when it improves decision making. In a business environment that produces ever-increasing amounts of data, that basic premise is easy to forget. If knowing the turnover rate itself doesn’t impact any management decisions, the metric is useless. It’s like hiking with a compass in your pocket. The compass only is helpful if you take it out and let the information it provides change your direction. HR leaders must consider which decisions they are trying to improve; which behaviors they are trying to change; and how the metrics they collect, analyze and report will influence these factors. Only then can they determine what to measure and what to do with the data they collect. A thoughtful, logical approach to measurement and analytics also allows HR leaders to provide information and counsel on how better talent decisions result in greater business success. For instance, the most important decision in the hiring process is deciding to whom to offer the position. Yet, when you ask HR professionals what data they measure and report, it is rare to find metrics that track the quality of hiring decisions. Instead, many organizations keep metrics on the number of candidates applying for each position or how many job offers are accepted. Ultimately, organizations are trying to improve the quality of the talent they hire. Many factors go into that, but a key factor is the hiring manager’s ability to select the best candidate from the slate. Ask leaders In the future, HR likely will have data, frameworks and analytics as powerful as those of finance, marketing and operations. But for now, review current HR reports and look for opportunities to enhance their value to the organization. Consider these tips: 1. Clearly define the purpose of metrics. The single most important step in creating powerful analytics is to identify the information organizational leaders want to know and the questions they want to answer. HR leaders must take a logical approach to what they need to measure and how to get information that will help improve enterprise decision making. Data should empower leaders, provide answers and hint at directions the executive team most want to consider. However, don’t obsess over metrics; focus on decisions. Which vital measurements will provide the results needed to improve processes, target efforts and improve overall talent management and business strategies? 2. Seek quality vs. quantity. A few highly relevant metrics are more valuable than a large number of interesting metrics, and a few insightful analyses are more important than many pages of reports. There certainly is no proof that more measures means better decisions. In the current era of HRIS systems, most companies are overloaded with data. Instead of spinning out reams of paper filled with superficial numbers, produce information and targeted analysis to get right to the core areas of the organization’s interest. 32 April 2008 talent management magazine www.TalentMgt.com http://www.TalentMgt.com
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