Metrics in HR Analytics – The Meaning & Importance

Learn what HR Metrics mean – common definitions, types and why they matter in the world of business. Latest in the series by Dr. D. Rai

Metrics in HR Analytics – The Meaning & Importance

Utilization of concept of HR metrics and analytics has taken a quantum jump, during the present decade, as per one survey , conducted by Oracle.

Organizations have used it around the world, to perform predictive & prescriptive analytics.

In addition to the above , Organizations are also measuring and using HR metrics for planning the future of their workforce.

In this context, it will be quiet worthwhile to discuss “Metrics in HR Analytics – The Meaning & Importance”

The author requests the reader to go through the seven blogs, which, CHRMP has published on HR Analytics.

HR Analytics – Meaning & Importance

How to Get Started with HR Analytics in Your Organization

5 Best Books on HR Analytics

7 Tips for Effective Utilization of HR Analytics

7 V’s of Big Data on HR Analytics

What is the Difference Between HR Analytics , People Analytics, Workforce Analytics and Talent Analytics ?

HR Analytics, People Analytics, – Popularity & Trends in the World

1.0 Contents of the Blog

Keeping in view the title , the author proposes to discuss the following in this blog :

· Definitions

· Importance of metrics in HR Analytics

· Conclusions

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Photographer: patricia serna | Source: Unsplash

2.0 Definitions

The author has selected 3 definitions of HR metrics from the literature.

In addition to the above three definitions from literature,, we have also tried to furnish our own.

You may refer our earlier blogs , for knowing the definition of HR Analytics and related aspects in detail.

2.1 Definition of HR Metrics as per Wikipedia

As per Wikipedia, the definition of HR Metrics is as follows :
HR Metrics are the measurements , which we use ,to determine the value or effectiveness of HR initiatives, typically including such areas as turnover, training, return on human capital, cost of labor and expenses per employee.

2.2 Definition of HR metrics as per reference, www.status.net

The reference, www.status.net , describes HR metrics as follows:

HR Metrics help companies, how personnel efforts are optimizing their business, and reveal vulnerabilities that leaders need to address.

2.3 Definition of HR metrics as per reference, www. bamboohr.com

They define it very briefly and crisply as follows:
HR Metrics are key figures that help organizations track their human capital, & it measures how effective their human resource initiatives are.

2.4 Definition of HR Metrics as per Author

At CHRMP, we have defined Metrics as follows, taking into view, several related aspects:

The HR metrics are specific, realistic & quantifiable indices of HR activities, which are used to measure the organisation’s performance.

2.4.1 Structure of metrics

HR metrics are of two types :

  • Primary metrics
  • Secondary metrics.

Primary metrics must capture the essence of what your project gains to accomplish.

For example: Turnover Rate of employees in the organizations

On the other hand ,the Secondary metrics are the additional data dimensions & segmentation ,which may be important to your analysis. We must bear in mind that the secondary metrics are, from where the most insightful observations may evolve. Turnover Rate of organization is primary metrics. However ,Turnover Rate of Millennials, Turnover Rate per Manager, Turnover Rate as per location, Turnover Rate as per gender , may be secondary metrics.

3.0 Importance of Metrics in HR Analytics

Metrics are extremely essential part of HR Analytics. They are the number that tell you the information about the activity or process under observation. They also tell you the exact or accurate measurement about how you are carrying out the the process . It may provide the base to suggest improvements.

HR metrics in analytics must fulfill the following objectives:

  • Helping leaders to understand in a better way, how to move forward and take intelligent business decisions.
  • Tracking activity ,and as a consequence, reporting number in different domains of Human Resource Management like recruitment, on boarding, learning & development, HR operations, performance management and employee experience etc
  • Quantifying costs and impacts of HR and business processes.
  • Tracking the business to know:
    – Where it has been ?
    – Where it is going?
    – When your business has reached target?
    -When the target was missed?
    – When something is going wrong ?
    – What will be the shape of things in future ?

4.0 Conclusions

Black Marker on Gold Paper
Photographer: Kelly Sikkema | Source: Unsplash

We may arrive at the following conclusions, based on the above discussions.

Author has evolved a new definition as follows:

The HR metrics are specific, realistic & quantifiable indices of HR activities, which are used to measure the organisation’s performance.

HR metrics are primary & secondary. Both work together to measure the performance , & understand the patterns of what has happened for better insights.

HR metrics follow a vital role in tracking the business, to know the following:
– What has happened in the past?
– What is the present state of affairs?
– Whether the business has achieved the target?
– When something is going wrong?

In short, HR metrics have to be specific , realistic & targeted , as the ultimate goal is to track, or measure the performance. We do this in line with the organization or departments scorecard, that has already been previously set. Thus , we have to do the tracking of any business activity , in line with the larger goals of the organizations.

If you are looking to upgrade your skills in HR Analytics, you might want to consider a certification in HR Analytics by CHRMP. To learn more click here.

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