Why Are HR Department Performance Metrics So Important?

At Saratoga Human Resources Solutions, we believe that the Human Resources Department should be a key strategic partner to the CEO and senior management of an organization.  This “seat at the table” is earned, however, through strong tactical execution.

We are often called to assist an organization who is finding that the HR department is struggling to deliver value to the organization because of operational issues.  When we get this call, we usually start by measuring key processes in the department, as well as several overall organizational measures.

Below are some of the measures we look at when assessing an organization and their HR function:

  • Compliance and policy – Is the organization following, and do they understand the myriad of labor, wage and hour, and safety laws? Are managers well versed in these compliance issues?
  • Benefit participation, EAP utilization, retirement plan participation and employee investment trends. Low utilization of benefits, and a high percentage of default investment in a retirement plan often indicate a lack of effective communication to employees from HR and the organization
  • Accuracy – from payroll, to payroll deductions for benefits, to correct coding for budgets. A big area of concern is the ability of an HR department to conduct an accurate and timely annual enrollment for benefits
  • Safety – how many employee injuries have occurred? Are these increasing or decreasing?
  • Employee leaves – between FMLA, PFL, FFCRA, Worker’s Compensation, Disability, Paid Sick Leave (2021) – how many employees are out on leave on any given day? This has significant impact on scheduling staff, overtime expense, and potential employee burnout for those still at work.
  • Recruiting – how quickly are resumes processed and forwarded to hiring managers? How long is it taking for hiring managers to make decisions on the resumes they receive? Recruiting is a cross functional process, so being able to measure key points in the process is important.  What is total cycle time?  What is the overall vacancy rate across the organization, and in key roles (differs by industry)?  Is the vacancy rate increasing or declining?  How many resumes is the organization receiving, both by position and in total?  Is this number increasing or declining?  How is the organization sourcing candidates, and are those sources effective?
  • Turnover – both for the overall organization and by department. Is your organization gathering data on the reason people are leaving?  What is this data indicating?  Turnover is a leading indicator of employee dissatisfaction, and being able to calculate turnover at the department level can help identify a manager who may need some skill development.

On our web site, we have a number of case studies to show the positive impact we have had on the organizations that we have worked with.  This process always starts with understanding the key HR metrics for the department and the organization.

If your HR function is struggling to add value, or is not trusted by staff and management, we can help.  Give us a call today at 518-429-0308, or e-mail me at [email protected]

Saratoga Human Resources Solutions