HR leaders have become increasingly savvy with their use of data in recent years. Assets like data analysis tools, continuous listening programmes and research-based workforce planning solutions all add to the view of HR as a meaningful, measurable, profit centre.

This has allowed the best in the industry to put forward solid business cases for their programmes and initiatives, winning over their colleagues with evidence-based proposals centred on the link between HR metrics and organisational performance.

However, with a greater impact on the business comes greater accountability. The new generation of practitioners must have a firm understanding of their organisation’s data and how ‘people analytics’ feed into a company’s wider data strategy.

Without a clear data strategy it can be hard to know which data points to focus on, and detrimental if you get it wrong. When using people analytics to support your business, it’s key to focus on organisational performance metrics, with four key indicators lying at the heart of any data-driven HR campaign:

Organisational performance metrics

Organisational performance metrics are the metrics that employee actions actively influence. Historically, HR departments would attempt to justify programmes based on retention figures and cost of replacement. These calculations only imply a correlation between actions and profitability, and as the adage goes ‘correlation is not causation’. Still, that’s not to say that they can’t be valuable, but they are very much the basics when it comes to measuring the success of HR.

It’s no longer necessary to simply imply causality, with rapid data gathering techniques and deep analytics tools, it’s possible to show direct relationships between HR actions and business impacts. These evidence-based explanations are fundamental to proving the value of the initiatives you propose to executives. 

Specifically, the organisational performance metrics you should be measuring are; revenue per employee, operating margin, earnings per share, total shareholder return and return on assets.

If these seem like higher level data analyses than you’re used to, don’t worry. Think of it like a salesman knowing what a customer wants in order to sell a product, knowing what your executives want will help you “sell in” your programmes internally.

Workplace monitoring metrics

Luckily for HR professionals, this set are much more in the wheelhouse of traditional HR metrics. These also form the foundations of what people would normally call a “big data” set when merged with other data points to determine which elements impact the organisational performance metrics.

Typically, these metrics include; open hiring requisitions, time to fill open requisitions, cost per hire, number of candidates per hire, worker productivity/quality, absentee rate and voluntary vs. involuntary terminations.

You’d be surprised how many organisations simply don’t track these metrics, but they’re all vital. Identify which of these you want to impact and from that how much the organisational metrics will in turn be impacted.

Key customer metrics
Sales and marketing metrics often fly under the radar of HR teams, however, they are deeply interwoven into any analysis of organisational performance metrics, workplace monitoring metrics, key customer metrics and voice of the employee data.

This data is typically recorded by marketing or customer experience teams, so a collaborative approach between teams is needed. Integrating HR data with that of marketing and CX teams allows you to further configure your work and the development of your people to deliver the most benefit.

When thinking about customers, the most common metrics to look out for are; customer satisfaction/ /engagement, net promoter scores, share of wallet, number of products purchased, customer retention, average revenue per customer, profitability and client growth.

Voice of the employee data
Capturing voice of the employee data and feedback from managers is the final layer in our people analytics big data set. The equivalent terminology in the world of marketing would be primary research. Enriching the quantitative data that you’ve collected with this qualitative information allows you to pinpoint the exact managerial techniques, operational processes or organisational policies that impact organisational performance, workplace monitoring and key customer metrics.

Metrics that you typically see when measuring voice of the employee data include; employee engagement levels, pulsing and continuous listening, lifecycle monitoring, performance reviews, onboarding/exit interviews, candidate experience surveys, development program evaluations and assessment results.

By understanding exactly which metrics you want to influence, and how your HR programmes will influence them, you can put forward a far more compelling case to your executive team. This will not only help you secure future buy-in for HR initiatives, but also ensure that those initiatives are more measurable, and more effective, in future.