How do people metrics drive your business forward?


People analytics, or metrics, is the analysis of people-data used to solve business problems. HR analytics uses data such as payroll and absence management, together with business information, e.g. operational performance data.

These key performance indicators are being used in many organisations to help gain insight into an organisation’s workforce to, for example, improve recruitment and employee retention, get better-engaged employees and/or enable data driven decisions resulting in a more successful organisation.

In a nutshell, metrics drive improvement and help organisations focus on what is important. Metrics should support and reflect strategy within the business and can help the company prioritise on what is important and formulate what success looks like.

Senior leadership involvement

Are your senior leaders onboard? It’s crucial to have the support and endorsement of senior management when embarking on such data mining activities, as the results should lead to positive action being taken, but what drives senior leaders to act? Generally, senior executives focus on revenue, productivity and innovation so you need to formulate and communicate in this way. Gain their buy-in and grab their attention with high impact metrics aligned to strategic priorities. Providing evidence as to why the data collected can have an impact on the business gives the best chance of leadership climbing aboard. Include regular reports and detailed analysis communications, and your senior managers will be able to link HR analytics to their business metrics – job done!

So, isn’t this something that all businesses should be investing in? After reading the above, you would think so. However, according to a study conducted by Harvard Business Review, despite being aware of the importance and value of this data, only around 51% of businesses really make use of people metrics. Further, a report by PwC states that although 75% of companies rate HR analytics as a priority, 40% are limited to basic reporting and less than 20% are able to predict analytics. Is this a technology and data storage problem, or does it beg the question, how do companies approach this process? How do they gather, process and actually use the data? Furthermore, which metrics matter?

Metrics that matter

My thoughts are: keep it simple. There is so much data available, it would be easy to go overboard and end up drowning in information. Work on a strategy; decide what’s important, how metrics can work for your business and which ones will provide you with the information needed to gain insight into your workforce.

Some common metrics include:

  • Staff costs
  • Headcount
  • Employee turnover (voluntary resignation rate) and turnover for critical talent
  • New hire turnover (within the six months)
  • Cost per hire
  • Time to hire
  • Quality of hire and manager satisfaction
  • Gender gaps for pay, promotions and reward
  • Diversity metrics
  • Effectiveness of training programmes
  • Employee/company performance
  • Employee engagement
  • Employee relations
  • Absenteeism

Once the metrics have been agreed, they must be measured on an ongoing basis to identify progress and analyse. Problems can be identified and remedied and decisions can be made on the evidence provided to ensure that these situations don’t arise in the future. The results gathered have an impact on behaviours moving forward, which result in saving time, saving money and providing a wholly more efficient process. For example, by understanding the metrics that surround recruitment, carrying out an analysis on the process and determining where efficiencies can be made, you may be able to reduce your recruitment costs.


Regular benchmarking is vital for HR professionals. It involves measuring processes, practices and results against the competition and enables HR departments to measure company performance compared to similar businesses. For example, if a business is considering increasing the starting salary for new graduates, it can check against its peers to assess comparative ratings, create an attractive and competitive package to attract talent,
whilst not adding unnecessary costs.

People metrics is a commitment which can affect many areas of a business. With meaningful conversations involving senior leaders around how the data can be used, how metrics impact performance, a clear strategy around what the business is trying to achieve, it is possible to provide workable solutions and insight into promoting a successful, profitable environment with the best possible outcomes.

If you’d like some help on identifying which metrics are right for your business to start looking at, and how to use those to get results, please get in touch.

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