Network - Fall 2010 - (Page 35)

O Feature Drowning in Data Get the most out of metrics By Michelle Morra t’s hard to believe data was ever scarce. Before HR departments started using automated systems, relevant workforce performance metrics were often hard to come by. In recent years, the power of data collection and analysis tools have grown exponentially, but many companies, while able to generate an avalanche of data, have yet to grasp what the numbers really mean, or how to use them effectively. “Automated systems are getting better at lessening the workload of collecting human capital-related data, but the data is rarely used to its potential,” says Philip Hunter, PhD, of Saratoga Canada at PricewaterhouseCoopers, which helps organizations benchmark their workforce and HR effectiveness against leaders in their respective industries. Take a simple but important metric such as Human Capital I ROI (Revenue – (Operating Cost – Labour Cost) / Labour Cost), which shows the pre-tax profit for every dollar invested in pay and benefits. “Every organization should have easy access to these figures, but rarely do,” says Hunter. So how can organizations use human capital metrics to measure, assess and increase the effectiveness of their workforce? Here are three ways to start, or get back on, the right track. Link to Strategy Metrics are only a tool to help the business make intelligent, well-informed decisions, and are useful to the extent that they achieve that purpose. For that reason, it is essential that HR possess the business knowledge and skills to understand the business strategies, its objectives and the information the business needs to reach those objectives. Seven of Saratoga’s more unique metrics Metric Description Executive Stability Ratio Executive Succession Pipeline Depth HR Headcount Ratio HR Costs Per Employee Potential Organizational Knowledge Loss Per Cent Over Next Five Years High Performer Separation Rate Voluntary Turnover Cost as a Percentage of Profit Per cent of executives with three or more years of service Average number of succession planning candidates for each executive Number of employees each HR employee supports Amount directly invested in the HR department for each employee Per cent of total knowledge and skill in the organization potentially lost through retirement over the next five years Per cent of high performer employees who left the organization Average voluntary turnover cost as a percentage of profit O 35 NETWORK O Fall 2010

Table of Contents for the Digital Edition of Network - Fall 2010

Network - Fall 2010
HRIA President’s Message
HRIA Membership = Career Advancement
HR Abstract
Social Networking: The Good, the Bad and the Legal
Shifting Focus Harnessing Technology for Learning and Development
Technology in Recruiting: All It’s Cracked Up To Be?
Drowning in Data: Get the Most Out of Metrics
HR Data Management: Gains Through Employee Empowerment
Technology Aids the Human Touch
The HR Office True-life Tales from the HR Profession
Index of Advertisers

Network - Fall 2010