How can HR speak the language of business: HR Metrics and Analytics

Throughout last year's U.S. presidential race and since his election in January, President Donald Trump has given speeches and statements which have been called out for being downright myths, lies and figments of his own imagination. Collectively, I call these the “Trump syndrome”—really just a simple term for the tendency of a person to speak or make judgements without the benefit of facts, numbers, logic, reasoning or science.

Unfortunately, many people think HR also suffers from the Trump syndrome.

As an example, as many of you know, I teach a required MBA course on human resources management (HRM) at GLOBIS University, Japan’s largest MBA school. At the start of the course, I ask the students what’s the first thing that comes into their minds when they hear the term “HR.” I get the same sets of answers every time: recruiting, employee relations, compensation, benefits, performance management, training and development, employee engagement, and so on.

Now when you ask the same question but this time change HR to “accounting,” “finance,” or even “marketing,” most often than not you’ll get answers around financial ratios, debits and credits, accounts payables and receivables, market shares, market penetration rates, customer satisfaction rates, etc.

So what’s the difference? HR is readily more associated with the qualitative tasks, while accounting, finance or marketing with the quantitative tasks. That is, HR seems to suffer from a perception problem, one that stereotypes the profession as only capable of doing the “soft” or “touchy” part of the business. Bluntly speaking, most people think that HR can’t speak numbers—arguably the basic language of business.

How did this happen?

For a long time and until now, HR has never been a recognized profession, around the world, and especially in Japan. In fact, not one school in Japan offers an undergraduate degree in HRM. If HR is taught, it is most likely one of the subjects in another course like MBA, or as part of a continuing education program.

For most HR professionals in Japan, they landed in HR because of job rotation. Some went to HR purely by accident or by chance while others ended up in HR because HR was the last place that they can be placed at, i.e., a dumping ground for an organization’s “basket of unplaceables.” (Suggested Reading: Why Are You in HR?: A Hint -- It Shouldn’t be Just About the PeopleThe HR Agenda Magazine, Oct-Dec 2013 issue)

In the absence of the rigor and academic discipline that goes with a formal study of HRM in a school or university, HR has unfortunately floundered to do its job based on gut feelings, hunches, “human relationships,” established policies and procedures, “best practices,” and politicking and policing. In my more than 25 years of HR experience and meetings with hundreds of HR professionals of many nationalities, I know very few HR professionals who make their decisions based on a mix of “soft” and “hard” data such as HR metrics and analytics. In fact, I haven’t heard of an HR professional being called a “geek” or a “nerd,” much like engineers or programmers are most likely to be called as such.

Why facts and numbers matter... even in HR

Simple answer: Because what you can measure, you can improve. In addition, the use of facts and numbers help us to be more objective. If the data and facts are collected in a scientific manner, it adds more credibility to the decision-making process so that business can make informed decisions.

As steward of an organization’s most important asset, its people, HR professionals are in a unique and opportune position to influence and shape performance by using people metrics and analytics.

 -If you are in recruiting, metrics like cost-per-hire, quality of hire, and time-to-hire are just some of the numbers that you need to know to formulate an effective talent acquisition strategy

 -If you are in training and development, the RoT (return-on-training) and Training Effectiveness (TE) of your training programs would probably top the list of the key indicators that you need to know and use to maximize your investment in people.

 -Similarly, if you are doing compensation and benefits, the knowledge on which percentile your organization is paying versus the market (i.e., below, at par, or above the market) will help your organization attract and retain talent.

This may come as a surprise for many HR professionals but in reality, there are numerous metrics and analytics that HR can use to measure and shape the performance of people and the organization. That is, HR can also be ruled by numbers. In doing so, we can help transform HR from an art to a science, which is really the first step in elevating HR to a recognized profession inside and outside of Japan.

Facts and numbers matter—even in HR. When HR bases its decisions on facts and numbers and not just on feelings, broken assumptions or even cultural inertia, HR can make better people decisions which truly matter in business. After all, as Jack Welch once said, “Business is about people.”

Abridged with permission. Original article can be read here.

Photo copyright: diawka / 123RF Stock Photo

Jun Kabigting, MBA/MS/SPHRi is representative director and president of HR Central K.K., a lecturer at GLOBIS University, and an adjunct professor with Temple University Japan Campus. He is the Founding Chief Community Officer of The Japan HR Society (JHRS) and also serves as the Managing Editor of The HR Agenda -- Japan's first & only bilingual HR magazine.
Jun has more than 25 years of experience across the entire HR value chain, most of them Japan-focused. He has a solid experience as a trainer, HR consultant, and talent acquisition professional. He likewise serves as nominal representative and/or external director for other organizations.
Jun holds an MBA from the University of Hawaii, an M.S. in Industrial Engineering from the University of the Philippines, a Certificate in HR Studies from Cornell University’s School of Industrial Labor and Relations and credentialed as a Senior HR Professional - International (SPHRi) by the HR Certification Institute (HRCI) and an accredited Harrison Assessments (HA) consultant and solutions provider in Japan.
He has been a frequent speaker/resource person in various domestic and international HR conferences in Japan, Singapore, Malaysia, and USA. He passionately believes in advancing the HR agenda in Japan through continuing HR education, knowledge sharing and use of HR best practices.   http://www.hrcentral.co.jp/    http://jhrs.org/hr_agenda        http://www.hrcentral.co.jp/profiling

PAGE
TOP