With data and analytics still at the top of the HR agenda for 2019, which are the key metrics HR should be measuring? New analysis from XpertHR Benchmarking reveals the data points HR should be focusing on.
It is essential that HR identifies, measures and monitors the people metrics that can have the biggest impact on the organisation.
Analysis of traffic data for the HR metrics tool over the past year reveals there are three key metrics that matter to HR: labour turnover, absence, and the ratio of employees to HR staff (see box, right).
Data moves to centre stage
We can expect to see “more adoption of HR data and analytics in 2019, in line with people analytics continuing to shift from the periphery to the core of HR strategy,” according to people analytics specialist David Green.
He points to research that finds that organisations with advanced people analytics capabilities tend to have higher profit margins. “That sounds like the perfect clarion call for data-driven HR to me,” says Green.
The CIPD agrees that data and analytics are now critical to the success of the HR profession. “As HR becomes more professionalised, more impact-driven, we’re putting a greater emphasis on evidence,” says CIPD senior research advisor Edward Houghton, speaking at the recent CIPD HR analytics conference.
Reflecting this, the new CIPD HR profession map identifies evidence-based decision making as a central capability for modern HR.
Retention was a critical concern for HR in 2018. The median voluntary resignation rate has risen to 14% in the latest XpertHR data.
“It’s no surprise that we have seen labour turnover rates going up over the last few years,” comments XpertHR senior HR practice editor Noelle Murphy, in an XpertHR podcast on essential HR metrics.
“This is because the level of employment in the UK is at a record high. Every time you have a high-employment situation in the labour market, you’ll see high levels of churn in the workforce.”
Rates of sickness absence have fallen over recent years, with XpertHR recording a median absence rate of 2.5% of working time for UK employers in 2018, down from 2.9% in 2017.
This downward trend could reflect employees’ ongoing concerns about job security (perhaps heightened by Brexit on the horizon), combined with HR’s increased focus on collecting quality data on this essential metric, leading to more accurate and robust readings.
“We have seen the quality of data around absence rates improving,” Murphy adds. However, she believes that HR can further improve the absence data that it collects: “HR doesn’t tend to gather data consistently on the indirect costs of absence, or absence costs for the organisation as a whole. But if HR can get an accurate picture of the cost of sickness absence, that builds their business case for the organisation to continue to invest in managing sickness absence.”
HR department resourcing
HR metrics data can also provide HR professionals with useful insights into the resourcing and performance of their own department.
For example, data on the ratio of employees to HR professionals can provide an indicator of whether HR risks being overworked and under-resourced, and to what degree.
The median number of employees per HR practitioner is 59.7 in the latest XpertHR data, compared with a median of 80 in 2011.
As the data published to XpertHR Benchmarking covers all stages of the employment relationship – from recruitment to terminations – the latest traffic data also reveals the measures that matter to HR beyond the traditional core numbers.
Our trending topics reveal six further key HR data sets for 2019 (see box, above).
The most valuable HR metrics data for each HR department will vary according to the strategic challenges facing their organisation.
But the potential value to HR of robust, authoritative data is common across all organisations. Data can play a critical role in helping HR to solve problems affecting the wider business. This can in turn help boost HR’s own standing within the organisation.
“This people data shifts business thinking,” says Gareth Jones, CEO at talent acquisition specialists Headstart, speaking at the 2018 Tucana people analytics conference. “There’s no doubt about it.”
Jones says that HR must always be clear as to the end goal of its people data activities: “We’re at an inflection point in terms of where the value is. The solutions have to be aimed toward the individual to really add value.”