Given to HR.com audience of over 250 Sept. 2009.

1. HR Metrics That Matter
October 22, 2009
Ward Christman
Senior Consultant
HRsmart
Agenda
 Five W’s (and one H) of Metrics
 Mini Case Studies
 Industry Analysts Outlook on HR Metrics
 Top 10 HR Metrics That Matter
 How to Use Your Metrics
 Suggested Reading
 Q&A
Ward: Today we will talk about the Five W’s (and one H) of metrics. We will discuss case
studies on what other companies do to measure HR programs. We will look at industry
analysts and HR metrics. We will talk about the top 10 HR metrics that matter and tips
on how to use metrics.

2. About the Presenter
Ward Christman, Sr. Consultant
Ward joined HRsmart as a Senior Consultant in 2002 bringing over 50 clients to the
HRsmart family since then.
Prior to HRsmart, Ward was the founder and President of JOBNET.c om, one of the
first employment sites on the Internet (launched as a BBS in 1992).
A Widener University engineering graduate, Ward has been active for over 15 years
in many local and national Human Resource organizations such as SHRM, PHRPS,
NHRA and IHRIM.
http://www.linkedin.com/in/wardchristman
About HRsmart
HRsmart provides a fully-integrated Talent Management Application suite, which
includes applicant tracking, performance management, learning management, career
development and succession planning in a single unified platform.
HRsmart helps organizations of all sizes attract, identify, develop, motivate and
retain top performers. HRsmart is headquartered in Richardson, Texas with
operations in the United States, Europe, Canada, Latin America, South Africa,
Australia and the Middle East.
I have been with HRsmart for seven and a half years working on e-recruiting and
Internet-based HR solutions. I am passionate about HR metrics and helping people
manage their talent through technology. I help measure the effectiveness of the HR
programs you use.
Poll #1
Your Role
I would like to start out with a poll. What is your role? It looks like most of you are HR
generalists but there is a split between groups.

3. Poll #2
Company Size
What size organization do you work with? It looks like there is an even split there too.
The good news is HR metrics can work in any size company.
What is a Metric?
Noun
• A standard for measuring or
evaluating something; basis for
assessment
Adjective
• Of or relating to the meter or the
metric system
Source: Dictionary.com
What is metrics? If you look at the delivery of the word, it bases on the metric system.
International companies use standard date and time formats.

4. Why HR Metrics?
HR Metrics is Evolving
1990 1995 2000 2010
Metrics Benchmarking Analytics Prediction
Goal: Use metrics to make HR a key asset of the business decision support system.
Source: HRsmart
HR metrics has been evolving since the 1990s. Benchmarking analytics is about
prediction. If you use metrics to help predict the future with confidence, you will be a
sought-after adviser with a key seat at the table. Many organizations are looking at how
to get the executives’ attention.
Top Talent Management Impacts on EBITA
Money, Money, Money
“Top performing talent management
organizations posted earnings before
interest, taxes and depreciation, and
amortization (EBITDA) that are 15%
higher than peer companies.”
Source: Hackett Group Research - HRO Magazine; May/June 2007
This is research from Hackett group. Though not that recent, it still holds true,
particularly with the slack economy today. It is all about the EBITDA. It is all about the
money. For top-performing talent management organizations this is the data executives
will often set up to improve EBITDA. It could improve as high as 15%. HR metrics help
your company perform better.

5. Gartner's Model for Types of Workforce Analytics Solutions
Source: Gartner, Inc, Defining Workforce Analytics by James Holincheck, 13 November 2008
There is research from about a year ago from Gartner, a leading top analyst in the
industry. If you look at HR metrics for measuring the workforce, workforce analytics is an
important part of that. There are different roles needed, but look for ways to engage in
decision support, a role typically played by HR analytic professionals. Engaging in
decision support can help your organization be more effective.
Which HR Metrics?
Goal: Find metrics that can align talent with business strategy.
Example: Workforce Planning
Why is it HOT?
• Increased Focus on Internal Mobility and Promotions
• Introduction of Career Planning and Career Maps
• Debut of Predictive Hiring
Workforce Internal
Recruiting Planning Mobility
Source: HRsmart
You want HR metrics that align talent with the business strategy. With the economy
today, the focus has been on internal mobility and promotions. It has been about helping
people map out their career. Combining recruiting and internal mobility gets you to
workforce planning because it helps you predict hiring. If you look at workforce planning
as a strategic part within HR metrics, it will help you define which HR metrics to look at.

6. Tying HR to the business
Capital = Assets available for use in the
production of further assets
Human Capital
Management value curve
Retention
Performance
Value
Productivity
Loyalty
Service
Efficiency
Source: Knowledge Infusion Tactical Strategic
Let us look at tying HR to the business. A recent analysis by Knowledge Infusion plots
the value with the tactical versus strategic. You want to move up the strategic arrow
towards performance and retention. To do that, you want to leverage the capital in the
organization. Capital is the CFO’s language for assets available for use in producing
further assets you manufacture. You need people who run the machines and the
company. Like most companies now who recognize workers, your organization’s main
capital are the people working for you. It is important to use the word human capital as
much as possible. Speak the language of your executives.
Poll #3
Maturity Level
With that, we have another poll. Where do you see your group fitting into current
metrics? Looking at the results, almost half of you do the basics and that is great. For
those doing the basic and regular HR metrics, pay attention to the top 10
recommendations I will soon give you.

7. Who needs to be on the HR Metrics Team?
• CHRO – champion & caretaker
• CFO – bottom line
• CEO – business initiatives
• CIO – technology ROI
• CMO – brand influence
• CSO – top line
• HRIS and Talent Management team – data hounds
On the HR metrics team should be the top executives, starting with the champion and
caretaker with the head of HR. Other executives and chiefs help round out who should
be on the team. Do not forget the data hounds, the HIS and talent management team,
they will help you get the data you need to do the analytics.
What data and what to do with it?
• Step 1
– Gather metrics being used by C-Suite
• CFO – EBITA, Profitability, etc.
• CEO – Customer retention, new market growth etc.
• Etc.
• Step 2
– Gather metric data from HR team & others
• Enlist HRIS and Talent Management team
• Partner with operations and IT as needed
• Step 3
– Correlate steps 1 and 2!
– Create a dashboard to present & monitor
What data and what to do with it, breaks into three simple steps. The first step is
gathering the metrics used by the C-suite, CFO and CEO. Some may not have a direct
tie with HR, which is okay. Step 2 is gathering the metric data from the HR team and
others that can help you. You will need support to do that effectively. In step three, you
correlate the two and ideally, create a dashboard to look for changes and ways to
improve.

8. What data and what to do with it?
• Step 1 - Interviewing C-Suite
– Ask what metrics they watch
– Probe for leading indicators (vs. lagging)
• Employee engagement
• Customer intent to renew or buy again
• Employee alignment
– Ask what they would watch if they could
– Ask how they think HR can help
For step one, interviewing the C-Suite is the most important way to get executive
sponsors. Ask them what metrics they want; it does not have to be HR metrics, it can be
business metrics. You want to probe for leading indicators not lagging indicators. You
want to look for employee engagement to see if there is trouble down the road or if
things are going smooth. Customer intent to renew or to buy is an important leading
indicator that will get the executives excited about what you are doing. Employee
alignment, do they align with what the executives care about? If not, why? What are they
measuring? Sometimes they do not have the data they want, and until you ask, they
may not ask for help. This is your chance to find out what they want to watch if they
could. Ask how HR can help. Find out their expectations.
What data and what to do with it?
Sample Collection Grid
CEO CFO CIO CHRO
Business Driver #1 New business Cost ROI on Employee
containment technology performance
Business Driver #2 Speed to Shareholder Security of Retention
market value customer data
Business Driver #3 Client
Retention
Business Driver #4 Shareholder
value
Business Driver #5
Business Driver #6
Business Driver #7
Source: The RODIN GROUP
People at the Rodin Group shared a simple collection grid of key business drivers. We
can break it down by executives. I threw in some samples. Your executives might share
something different. Collect the list as your starting point.

9. What data and what to do with it?
• Step 2 - Gather data & metrics from HR etc.
– HRIS and/or Payroll
• Headcount, turnover/retention, tenure
• Comp package
• Peer comparisons
– Talent Acquisition System (Recruiting)
• Cost per hire, Time to Fill, etc.
– Talent Management System(s)
• Inventory skills, competencies
• Performance history (HIPOs), work history
• Career paths, preferences (relo, FT/PT, etc.)
– Other data points related to C-Suite list
• Employee Satisfaction ratings
– Categorize above by job, division etc.
Step 2 is to gather the data and metrics from HR to help to tie in the previous step. If you
look at the HRIS or payroll, it should be simple to get head count, turnover and retention
tenure. You may not have exact numbers as it changes. The larger you are it may
change by the minute. Compensation, compare against peers; if you have a talent
acquisition approach, modern recruiting or applicant tracking programs, chances are you
already measure these things. Remember the pyramid. This may be not the top of the
pyramid it might be the bottom, but that is okay. Your talent management program looks
at what skills and competencies you have and performance history. Executives focus on
succession planning and work history. Look at the data points related to the C-suite list
you collected and at employee satisfaction ratings. Classify these by job and by division.
As these things come together, you can draw comparisons to help your executives
understand their human capital.
What data and what to do with it?
Sample Organization Grid
CEO CFO CIO CHRO
Talent Hire top talent Hire for less ROI on ATS Hire top
Acquisition faster cost performers
(Recruiting)
Performance Goal
Management attainment
Career
Development
Succession
Planning
Learning &
Development
Comp/Rewards &
Recognition
Benefits
Source: The RODIN GROUP
With this grid, we take the key areas of HR and break it down. We take the executives’
wish list and try to compare, relate and correlate the two. As example, the CEO’s chief

10. goals might be to hire top talent quickly. You can tie the metrics related to talent
acquisition. Collect the necessary information.
What to do with the data?
• Step 3 – Correlate Steps 1 & 2
– How do I correlate?
• Use top 10 list as starting point
• Focus on CEO
• Look at industry benchmarks and demographics
– Make score cards
– Make meaningful or don’t do it
• Enlist experts (inside and outside)
• Leverage technology
– Create a dashboard to present & monitor
• Use existing tools (Excel, TMS, HRMS, Cognos)
• Enlist experts like DoubleStar, InfoHRM, etc.
Then, you want to figure out what to do with the data, which leads to step three;
correlating steps one and two. I will share with you my top 10 list as a starting point.
They are some key business metrics so you can tie HR back to the business. Focus on
the CEO. They have the most visibility and the most influence. Look at industry
benchmarks and annual awards. Look at demographics and scorecards, make sure it is
meaningful data. Enlist experts mainly inside the company and accept help outside too,
leverage technology. To correlate the data, look for overlapping areas where you can
pull this together, ask for help, and if you can, use technology to support this. Create a
dashboard to present and watch. Share it with others and look for changes. Look for
direction. If all you have, is Excel available, use that, verify your tools. If you have a
talent management or HR program or reporting tools, use those. Ask experts in-house
for help. If you need to look outside, some great vendors can help with workforce
analytics and HR metrics.
Mini Case Studies
What are the top 3 HR metrics your CEO or CFO find most useful?
– Turnover rates; Headcount; Recruiting – positions filled
– DB, VP HR
– Turnover rate; Cost per hire; adherence to merit budget – PY, VP HR
– RG, VP HR & Strategic Planning:
• Scores from Associate Engagement Survey
• Associate retention/turnover
• Pension and benefits costs
– DV, SVP HR:
• Overall employee retention (includes engagement) and Turnover (with special emphasis
on Sales turnover)
• Quality Staffing and the depth of our succession planning candidates (with emphasis on
Diversity candidates)
• Overall HR costs (e.g., benefits, training, recruiting, relocation, wages, etc.)
– …Succession Planning. They are concerned with the number of employees approaching
retirement age, the positions in which successor gaps exist. They are also looking at internal
vs external hires. Diversity numbers are also key. – DM, Dir. HR
Source: HRsmart Survey June 2009

11. I would like to talk about some companies where their top executives answered three
questions. The first question I posed to them was, what are the top three HR metrics
your CEO or CFO finds useful? They were talking about turnover, head counts, filling
positions, which is all good information but they do not tie necessarily to the business.
Mini Case Studies
What is your favorite metric(s) to track how HR is impacting the business?
– HR strategic plan project implementation
– DB, VP HR
– Sales Productivity – DV, SVP HR
– RG, VP HR & Strategic Planning
• Scores from Associate Engagement Survey
• Associate retention/turnover
• Productivity and performance measures/ratios (measuring the impact of
hiring/staffing effectiveness on the business bottom-line)
• Succession plans (gap analysis)
– I believe that the metric which shows the best impact on the business is a low
turnover rate. This generally means that we are treating our employees well, are
offering them opportunities for growth. The businesses benefit by maintaining a
talented and skilled workforce. We all know the cost of turnover. – DM, Dir.
HR
Source: HRsmart Survey June 2009
The second question was what their favorite metrics to track were and how HR
influences the business. There was a range from productivity to engagement. Turnover
is a gauge; are people happy and do they feel they are effective in their role.
I want to share this study with you from this past June.
Mini Case Studies
If you could have any HR metrics you don’t have today, what would they be?
– Client satisfaction re: HR service delivery – DB, VP HR
– Development of succession planning candidates correlated to their performance and success
to the business. – DV, SVP HR
– …the power in metrics is much more around long term trends and the ability to connect
business results to what, if any, people metrics have a hand in driving those results. It is
about being able to spot outliers and anomalies. Typically that takes a lot of experience
and a willingness to swim in a lot of data to try to make sense of it. What can be incredibly
interesting one year, is a yawner the next. You need to measure a lot, and then distill to the
critical and relevant few. – KG, VP HR
– I would like to see employee satisfaction data for the population.
This would drill down on the hot buttons – DM, Dir. HR
– Better measures of the correlation between HR actions and progra ms and bottom-line
business impact over time (recruiting; training; assessment tests; wellness initiatives;
compensation and benefits plans/programs; talent management strategies; outside
leadership development programs; executive compensation/benefits/perks; reward and
recognition programs; organization development interventions; etc.) – RG, VP HR &
Strategic Planning
Source: HRsmart Survey June 2009
The last question I posed to the leading executives was what HR metrics they wanted if
they could have any. Their answers tied to the business; client satisfaction, succession
planning and correlating that to performance and success to the business. Knowing what
is important to your executives. One executive mentioned something that was important

12. last year is not any more this year. Look for things that might change yearly, so you can
adapt your measurements.
Industry Stats
• Which best describes your most immediate area of need for
workforce analytics?
Source: DoubleStar
Here are some industry statistics from DoubleStar when they measured and took polls.
Executives felt talent management needed dealing with immediately followed by
developing leaders, measuring performance, and helping people to learn and develop.
Other areas are far behind in talent management.
Workforce Analytics Benchmark Report
Source: Aberdeen Group, August 2006
This is from the Aberdeen Group. Although this is a few years old, it is relevant still
today. They looked at the best-in-class companies, those performing best on Wall
Street with the best earnings. They benchmarked those and compared it to other
companies, the industry norms. The best-in-class companies perform the best; they are
most profitable. They take the time to look at their workforce and assess their skills.
They make sure they have the right means for succession and the next leaders of the
organization. This shows executives the most relevant HR data can influence the daily
operations of the business. Talent transition, retention and redeployment of talent

13. internally, compared to the industry norms is also great information to share with the
executives.
Key Issues in Human Capital Management Software
Strategic Planning Assumption(s)
• Through 2012, 50% of customers will consolidate their talent management
application portfolio to one or two vendors, as providers get close enough to best-
in-class capabilities across the whole talent management application suite (TMAS).
• Key Issue: ...relentless administrative process optimization is not enough.
Organizations must do more by focusing on strategic processes, including talent
management, and by building a more rigorous approach to HCM analytics. Self-
service is moving beyond the transactional into the analytical. As organizations
grapple with the recession, workforce planning becomes more critical than before.
Impact: Many organizations will focus on cost-saving initiatives, often tactical in
nature. The leading organizations will focus on improving cost savings, but also
will build for future recovery.
Planned Research: …plan to explore integrating CPM (corporate performance
management) and employee performance management and analytics.
Source: Gartner, Inc. Key Issues in Human Capital Management Software by Thomas Otter, James Holincheck, 2009 16 April
I pulled some highlights from Gartner’s recent reports that came out in April about
human capital management software. I highlighted some key things that might help you
in your measurement. When you look at strategic planning, over half of the customers
may be loyal to your organizations. Plan to consolidate your talent management
applications to one or two vendors. Another driver is workforce planning is becoming
more important than ever because organizations are trying to grapple with the recession.
They are getting ready for returns prosperity. Strategic planning is a big part at that.
Leading organizations will focus on improving cost savings. They look for the future
recovery. Explore integrating corporate performance, which is what they do on Wall
Street, and employee performance, management and analytics.
Defining Workforce Analytics
Many companies are making investments in talent management applications. Although
these applications provide a good foundation for strategic human capital management,
workforce analytics are the key to helping companies maximize the value of
investments in human capital.
Strategic Planning Assumption(s)
•By 2012, 20% of the Global 1000 organizations will have formal workforce decision
support programs (including people, processes, and tools).
Key Findings
•Valid data is necessary, but not sufficient. Getting value from workforce analytics
requires giving managers and executives the information they need to make the best
decisions about talent.
•Workforce analysis functionality can be drawn from human capital management
(HCM) applications, business intelligence (BI) applications, specialist workforce
analytic applications or a combination of the three.
•The use of workforce analytics is not widespread, but early resu lts indicate that
companies that deploy them are able to significantly improve their use of human
capital.
Source: Gartner, Inc. Defining Workforce Analytics by James Holincheck, 2008 13 November
Look specifically at workforce analytics. They shared some important information, which
can help companies maximize the value of the investments they have in human capital.

14. Analytics help only if managers and executives get the information they need. You can
be the champion. You can be the caretaker, but make sure managers embrace the data.
Create the data and the metrics. Study the metrics and leverage that information to
make payroll more effective. Using workforce analytics is not widespread. Early results
show companies who use them improve the use of human capital, tying back to helping
the business.
Defining Workforce Analytics… Cont’d
Recommendations
• Formulate a workforce analytic strategy to get the most from talent
management and workforce management investments. Don't be afraid to
start small; many early adopters have found it easier to focus on a few
metrics and get those right first to demonstrate value.
• When evaluating vendors for operational and executive reporting, ensure
that they not only have the infrastructure to pull together the necessary
data, but also have a strong understanding of which key performance
indicators (KPIs) are important to specific roles. Consultants can help.
• All tools require good data. If your organization has data in disparate
places with different definitions, then create a common repository of valid
and consistent data. Creating an HCM data warehouse/data mart can
provide a good foundation. HR should participate in the BI competency
center to ensure that workforce analytic initiatives complement BI and
performance management (PM) strategies.
• Make necessary investments in HR talent with the proper skills, training
and tools to do workforce planning, analysis and decision support. Don't
be afraid to bring in people without an HR background.
Source: Gartner, Inc. Defining Workforce Analytics by James Holincheck, 2008 13 November
A key industry analyst observation in the industry is to invest in talent. Make sure people
have the skills and training tools to do workforce planning. Support decisions of the
organization, decisions made by the executives running the business. Do not be afraid to
bring in people without an HR background. Some people in finance and IT have the
knowledge to take your data and look for insights that can help relate to the business
objectives of your executives.
Poll #4
CEO View
The last poll is what would your CEO say is the main benefit of HR metrics? Pick the one
your CEO would likely pick. The results show attracting and keeping talent is the leading

15. area. This is informative and not what I expected from previous webcasts. It spreads
evenly. Attracting and keeping talent should be at the top.
And now….
… The Top Ten HR Metrics
That Matter
The top ten HR metrics that matter are not in any particular order. I put them in an order
logical to me.
Top 10 HR Metrics That Matter: #10
• Goal alignment
– Who cares? C-suite will be watching their cascaded goals
– Examples:
• % of workforce on track with key corporate goals
• Completion rate of development plans tied to goals
– Track quarterly to plot trajectory
– Share metrics via company newsletter
– Use to re-align pay for performance plan
Goal alignment; what is more important than that? It should be number one. You can
turn these around as you wish but start with one that is strong, look at goal alignment. If
you look at key corporate goals, and time that to the percentage of the workforce, do
people align? Are they completing their development plans that tie to those goals? Are
they helping the business achieve its objectives? Help your business leaders get a
sense of whether your alignment converges properly or diverges.

16. Source: HRsmart
This is a radial diagram. Look at critical-impact jobs and decide whether they have the
proper competencies to be effective in that role. As example, suppose you are in the oil
and gas business. It is important to keep plans running. If you are in the financial
business, the analysts deciding what investment to make are important. If you look at the
average, you can identify gaps. That is where HR can intervene and support through
learning and development other programs to help your organization be more effective.
Top 10 HR Metrics That Matter: #9
• Mobility Quotient
– Who cares? CHRO, CAO
– Compare internal transfers/promotions to
external hires
• 2:1 ratio is good, higher for large orgs, lower for
small firms.
• Tie to development plans
• Connect to turnover
• Tie to engagement
Number nine is the mobility quotient. The two top executives interested are HR and
perhaps the administrative officer. Look at people transferring internally in promotions
compared to external hires. There is a ratio. A 2:1 ratio is good. For every 100 people
that transfer internally, you might have 50 new hires. It may vary based on organization
and size. Smaller companies may not have the liberty of moving people around as much
but it translates into effective workforce, more engaged. You can connect it to turnover;
help people develop. Engagement makes for happier customers and more prosperity for
the company.

17. Workforce Planning
Source: HRsmart
Workforce planning is about predicting hiring needs. If you predict you will have to fill 10
positions over the next year or three years, you can make hiring action plans. Ensure
your organization is ready for the next challenge.
Top 10 HR Metrics That Matter: #8
• Training / OD Effectiveness
– Who cares? Top line & efficiency watchers
– Examples:
• Sales training – increased revenues per sales rep
• Hourly workers – increased efficiency
• Managers – improved leadership ratings, higher employee
satisfaction ratings, less turnover, increased efficiency
– Generic savings - decrease in:
• Turnover
• Recruitment
• New hire training
• Learning curve factors
Number 8 highlights people in the training and OD groups. It is about helping them and
the organization achieve effectiveness. Where are the top line and efficiency watchers?
One of the easiest places to measure things is in sales. Look at revenue, is it going up?
Measure the hourly workers that take more calls and achieve higher satisfaction ratings
from customers. You can tie customer engagement back to training programs. Look at
lower turnover helping save you money. Executives like to hear that. Look for ways you
can save money by being more effective in delivering organizational development.

18. Source: HRsmart
Another example is the training initiatives. Compare your performance ratings. Did the
training help the performance? Turn to your executives and say you invested in excellent
training and development, the return was wide. Tell them the next time we will ask for
more support or funding. You will be in the driver’s seat at that point.
Source: HRsmart
Look at performance reviews. If people score low in certain areas, compare it with your
learning approach. Do you have programs to help people improve those competencies?
Most companies do not measure that. Have an online class or provide access to people
who are outside the training. It can make a difference in their effectiveness. When you
help people improve on their low-performing competencies as much as you help your
high potentials, you reach the next step.

19. Top 10 HR Metrics That Matter: #7
• Cost avoidance
– Who cares? CFO, CEO, CHRO
– Workers Compensation / safety claims, managing benefits -
2nd largest expense
– Dollars saved per ee by dept./div. based on new programs
Number 7 is cost avoidance. Your CFO or CEO cut costs by letting people go but keep
your workers’ comp, safety claims and benefits. These are your second largest expense
next to payroll. Break it down. Look at dollars saved by every department and division.
Tie it back to any new programs you launched to decide if it was effective. If it is working,
that is okay. You are measuring the expense. Adjust your programs going forward.
Date of Hire
Productivity
Cost Savings
•Recruiting Costs •On-Boarding
•Interviewing •Training
•Travel •Ramp up
•Lost productivity •Lost productivity
•Client service •Client service
Recruiting for example, should be straightforward. If you look at data of hires as a key
initiative you want to improve on, shrink those costs by hiring people faster. After using
technology and improving your procedures, your cost savings will improve. Cost cutting
is important, but do not forget productivity. The faster you can get people on board and
effective in their role, the more productive they will be. That adds to the ROI of your
talent and the overall effectiveness of your organization.

20. Top 10 HR Metrics That Matter: #6
• Employee Attitude / Satisfaction
– Who cares? Employees do!
– Happy employees make happy customers
– Attitude - leading indicator affecting
• Turnover
• Customer support / satisfaction
• Sales
• Productivity / efficiency
Number 6 is employee attitude and satisfaction. Employees care. Setting up programs to
help make happy employees will help make happy customers. It will help your business.
Their attitude will be a leading indicator. This will help you predict the future, which will
make you more of a strategic partner in HR. Predict turnover and customer support. If
employees are not happy, they will not be nice to the customers. Collaborate with your
marketing department to measure those HR metrics.
Top 10 HR Metrics That Matter: #5
• Total Compensation as a % of Revenue
– Who cares? CFO, CAO, CSO & Shareholders
– Measures Productivity
– Track against industry comps
– Chart by division – break out profits
– Analyze by job function, tenure, etc.
– Don’t forget to include outsourced help, temporaries,
and contractors
– Sister metric: Earnings per employee
Number 5 is total compensation. Measure it as a percent of revenue. If you are a public
company, shareholders look for this information. It measures productivity of the
organization. If you are underpaying people, compare against other people in your
industry, other companies. Break up profits if you can. Look at different divisions. Look at
the compensation tying it into these other things. Look at outsourced help. Some
companies spend money on temporary agents and contractors. Put that into the
equation because it may help, especially as the economy recovers. Many companies
bring in temporaries before hiring somebody full-time. Account for that because you do

21. not want false metrics. Many organizations measure earnings for each employee; I
propose the total comp by percent of revenue.
Top 10 HR Metrics That Matter: #4
• Human Capital ROI
– Who cares? CHRO, CSO, CAO, CEO
– Productivity – track by job class, tie to
product
– Performance – tie to business goals, track by
tenure, tie to comp
– Effectiveness – aggregate individual measures
– Development – measure investment, tie to all
items above
Metric four is human capital ROI, which ties to productivity. If you can break it down by
job class, tie it to a product your company offers. Tie performance to goals. Track it by
tenure. Track it to comp. You will find value to share with your executives. Measure
investment and tie it to the effectiveness of the investments you make in your human
capital.
Top 10 HR Metrics That Matter: #3
• Retention / Turnover
– Who cares? Everyone!
– Experience Lost
• Track overall %
• Track HIPOs separately
• Track business critical roles
(usually not management!)
• Track costs and compare to market
– Vacancy costs
– Absenteeism is a “temporary” turnover but has
similar cost implications – track closely!
Number three is critical these days. Retention and turnover is at an all-time low. The
economy has something to do with that. When you track your overall percentage, HIPOs
get visibility with the executive team. Break them up separately. Compare that against
the rest of the organization. Look at the business critical roles, which may be
management. Track the costs and compare them to the market. Some critical roles have
a bigger impact on the effectiveness of the organization. Look at the cost for vacancies.
If you can measure it, you can show the effectiveness tied back to customer or

22. employee satisfaction. It can give you the data and the final power to get the funding you
need to fill those roles. Absenteeism, people out on disability or maternity are examples
of temporary turnover but those have cost implications. Measure that. Balance your
workforce to help foster internal mobility and support, which is healthy for the
organization.
Source: HRsmart
Look at something like turnover and compare it to the source of hire. You may find some
of your new hires may deliver higher or lower turnover. Simple metrics can help you
save money in recruiting.
Top 10 HR Metrics That Matter: #2
• Quality of Hire
– Who cares? Nobody directly, but everyone
indirectly
– Track performance ratings against source of hire;
monitor over time (entire tenure!)
– Utilize 360s or rounded feedback; include
customers (internal and external)
– Measure internal hires separately; track changes in
subordinate performance ratings (if applicable)
and tie to cascaded goals
The number two metric that matters is quality of hire. When a new hire comes in that is
not a good fit, it can damage your organization, especially if they are a transfer from
another department. Measure to make sure you have good quality of hires. If you have a
bad quality of hires, learn about it sooner than later. Performance ratings, 360s or
rounded feedback help. These do not take much time but they can have huge
implications in identifying who delivers. Most companies measure internal hires

23. separately. Track the changes in performance ratings as people move around. It may
give you a sign if there is a problem manager. Tie it to the cascaded goals. That is what
executives look at. It would let you hire people that can deliver on those goals. When
you tie that to the referral source, you can sharpen your recruiting programs.
Source: HRsmart
If you use agencies to help supply talent, look at the different agencies involved. Get a
sense of which ones deliver performers; that is the supreme test.
Source: HRsmart
You pay money one way or another to bring people in. If you pay agencies, you want to
make sure you get results.

24. Top 10 HR Metrics That Matter: #1
• Talent Readiness
– Who cares? CEO, CHRO
– Measures corporate nimbleness
– Closely related to Workforce Planning
– Brings together
• Recruiting
• Retention
• Learning & Development
• Succession Planning
• Performance
• Operations, Sales, etc.
The number one metric that matters to every organization is talent readiness. It
measures corporate nimbleness, the ability to adapt. An executive’s role is to lead and
to change direction if needed. When they are ready to change, you want them to predict
the future. Workforce planning will help you. Can you get the staff to deliver what your
executives want? This is critical to your organization. We need to make changes and try
different approaches to our businesses. We need to introduce new business lines and
new products. Ensuring the talent is ready to help with this new business objective is
critical. It brings together all the key areas in HR, recruiting, retention, development,
succession and performance. It brings together all the different business units.
How to Use Your Metrics
• Choose the metrics most important to your
company
– Select a few to start
– The 20% that drives the 80% (most) value
– Make sure your numbers are accurate
• Use them as your HR metrics in Quarterly
Business Meetings with Senior Management
• Compare to appropriate benchmarks both
internally and externally
• Use Continuous Improvement
Source: Bob Keller, Norwood Promotional Products
Supremely, you want to pick metrics most important to your company. Start with a few;
do not bite off more than you can chew. Look for that 20% that drives the 80% of the
value. If you start with step one, interviewing the executives, find out what is important
to them. What are they measuring and what do they want to measure? Show them
something they are looking for. Give them some insight to help them drive the business.

25. Help them feel part of the decision support system. Use them in your HR metrics.
Provide updates quarterly with senior management. Get benchmarks among divisions. If
it is bad news, you still have to share the bad news. How can you improve your HR roles
if you do not have the data you need to measure how you are doing? Know where your
organization is going to go if you can supply the talent to deliver on the executive goals.
Suggested Reading - HR Metrics
• How to Measure Human Resources Management
– Jac Fitz-enz, Saratoga Institute, McGraw Hill
• Benchmarking, The Search for Industry Best Practices
that Lead to Superior Performance
– Robert C. Camp, Xerox, Quality Press
• SHRM Customized Human Capital Benchmarking Service
• http://www.birchtreehr.com/btblog/2009/01/effective-strategies-
for-hr-managers-working-with-the-c-suite.html
• http://www.indianashrm.org/speakers/handouts/BOB%20KELL
ER%20HR%20METRICS%20PRESENTATION%20INDIANA
%20SHRM%208-29-06%20-%20FINAL%208-21-06.ppt
Source: Bob Keller, Norwood Promotional Products
Thank you. Questions?
Contact HRsmart:
972-783-3000
marketing@HRsmart.com
www.HRsmart.com
Contact Ward Christman:
610-431-3165
Ward@HRsmart.com
Special Thanks
PHRPS Main Line LAN
Aberdeen, DoubleStar and Gartner
Parente Randolph, Crown Cork, UHS, Vanguard, IKON, AAA
Audience Question: We have various HR programs in-house. How can we best correlate
our HR data to get meaningful metrics?
Response: For the past 10 years, companies in the HR technology field have been
buying our programs; some are simply excel spreadsheets. Putting together this data is
not easy. Start with what your executives care about and dig around that. Get the
support from the executives to get technology to help collect and track that information.
Use consultants. If all the HR data and programs are in one talent management
program, it is easier.

26. Audience Question: Like any initiative, doing HR metrics takes time and money. How
can I get my senior team to back up such a request?
Response: The first step is to talk to the executive team. Ask them what they find most
important to measure related to the business. Ask them how they think HR can help.
That will give you metrics meaningful to the business objectives. Report on those and tie
it back to profitability or something important to the executives. Relate it and tie to the
human capital of the organization. Provide that value to them. Help them predict the
future. Make it a simple business case.
Audience Question: What is a workforce decision support program?
Response: Workforce decision support programs go back to the pyramid Gartner has.
Gartner recommends HR teams help with the analytics tying to the workforce decisions.
This includes interventions, opportunities and planning. Interventions include layoffs,
hiring and expanding people’s roles. Planning is what we will do for the future. Being part
of that decision support system is not easy. It comes down to measuring the
effectiveness of different HR programs. Know how they relate to the business.
Audience Question: What is the best source of benchmarking?
Response: There are two benchmarks, internal and external. Many people like to
compare themselves to peers in the industry. If you break down the different metrics by
job or division, your benchmarks may not be just against your peers in the industry. If
you are manufacturing against other manufacturing companies, maybe you have IT
engineers too. Compare against IT engineers, they do not necessarily have to be in your
specific industry. Once you get the shortlist from the executives, the metrics you want to
measure, give them the information they want to make business decisions. Do some
basic web searches. Get on Google and look for other organizations that publish some
of their data. Enlist a consulting firm to help you identify benchmarks if you need external
ones. You want to learn from their expertise and success.