It has taken many years to get to this point, but almost everyone in recruiting has come to understand the necessity of metrics. Unfortunately however, the vast majority of metrics in use today have little impact because they were not designed to effectively “get the attention” of executives.
The issue isn’t metrics in general; at firms like Microsoft and Google, executive team meetings are often referred to as the equivalent of “math camp.” While other firms may not be as “geeky,” metrics rule the boardroom. The lack of interest in HR metrics also cannot be attributed to HR being an overhead function, as that state is true for both finance and supply chain management, neither of which fail to garner attention.
The real issue few pay attention to HR metrics is a simple one: most simply are not compelling. Let’s face it: HR is rarely a strategic priority, and due to years of bureaucracy and failure to meet expectations, it is something that most managers and executives would rather deal with less rather than more unless it is immediately relevant to their business.
For metrics to be effective in altering behavior, they need to be both visible and immediately relevant to the audience that needs influencing, not the party producing them. To accomplish that, recruiting leaders need to proactively identify and understand the factors that make a metric a critical “must-see” metric. The goal behind measurement initiatives should be to get executives to demand access to your metrics, to pay thorough attention to them, and to know immediately how to act differently in response to them.
Five Differentiators of Great Metrics Initiatives
Most metrics initiatives kill the design phase upon selecting a final short list of “easy-to-provide” metrics. Unfortunately this approach assures mediocre results! Delivering “easy to provide” metrics is like writing a free newspaper to be delivered via those plastic cubes alongside major streets … the vast majority distributed end up as garbage littering the environment. Great metrics on the other hand are like a good book, article, or blog post: they tell a story.
In my years of advising leading organizations, I have noted five differentiators that truly distinguish great initiatives from all the rest, they include:
- Formal planning — they use research and benchmarking to go far beyond delivering what’s easy, taking into consideration the audience the metrics will need to influence.
- Compelling format — they deliver information in a manner that fits the interests of managers and executives, presenting data that tells a “complete” story.
- Visibility — they publish information in conjunction with other highly visible internal and external discussions, demonstrating HR’s relationship to operational performance.
- Relevance — they produce intelligence related to the key strategic initiatives of the day and secondary/tertiary topics that impact those initiatives.
- Emphasis on dollar impact — whether the metric provided is a descriptive word, a number, a percentage or a ratio, it is converted to “dollar impact.”
Each of the five differentiators can be approached in a variety of ways. The following checklist identifies 25 factors related to each of the categories listed above. Considering these factors when designing your recruiting metrics will go help a great deal with ensuring your managers and executives value them, pay attention to them, and change behavior as a result of having studied them.
Top 25 Characteristics of Great Metrics Initiatives (grouped by differentiator)
- Benchmark the best — rather than starting from scratch, do some benchmark research both inside and outside your organization to identify which metrics and reporting approaches have been successful elsewhere. Also don’t forget to learn about what didn’t work. Use your organization’s existing financial reports as a model of how your executives like their information reported, but viewing those of other organizations can spark new ideas.
- Be audience-centric — it’s always a good idea to survey or interview your target audience to identify their expectations, i.e. characteristics of a great metric that is most likely to gain their interest.
- Pretest your approach — rather than assuming that your metrics will be effective, pretest them with a sample audience. Include “super critics” to ensure a wide range of constructive feedback. Also, don’t forget to pretest with the CFO (the undisputed king of metrics). If the CFO supports your metrics, few will dare to question your efforts.
- Assess your process — even with the best-of-the-best initiatives there is room for improvement. Develop a formal process to periodically assess user satisfaction and value of information provided. Use the feedback wisely to make your metrics indispensable.
- Publish in multiple formats — executives and managers are people too, and they don’t all value information presented the same way. Providing your audience with metrics delivered in multiple formats can increase the likelihood they will pay attention. Options include a single-page report, online dashboard, thorough multi-page report, e-mail alert, presentation, or verbal overview. Online dashboards are the leading choice as the user can easily scan the information and drill down on topics of interest. Metrics themselves can be reported individually or grouped. The most common grouping include: a) Scorecards, summarizing key metrics; b) Indexes, combining several key metrics into a single indicator metric; and c) Dashboards, showing all available metrics simultaneously to enable operational decision making
- Include visual charts — compelling data points can quickly disappear in a sea of black ink for all but the most studious of math geeks. When focus needs to be drawn to a particular point, remember that a picture can substitute for 1,000 words (or numbers). When using visual charts, keep them simple, i.e. line or pie charts. If you can’t discern the story a graphic is telling in 10 seconds or less, it’s too complex!
- Provide comparisons — metrics presented without context are useless. For example, stating that the voluntary turnover rate is 26% means very little if I didn’t know that it was four times the industry average or double last period’s. Provide some benchmark comparison numbers for all major metrics. Those comparisons could include internal period comparisons (last quarter, last year, etc.), observed baseline comparisons (minimum, average, maximum), or external comparisons (industry average, best-in-class, direct competitors average, etc.)
- Use “their words” — HR jargon can distract or confuse your audience. Information published that seeks to influence their behavior needs to exclusively use “their words.” You can identify these words by examining their communications (e-mails, presentations, etc.)
- Relate metrics to a business goal — the reader should make the connection between your metrics and the business goals they impact (e.g. a 27% increase in time-to-fill revenue generating positions directly impacts the Q4 2010 goal of increasing revenue by 30%). You can make the connection clearer by listing the impacted business goal at the top of each chart or with each metric.
- Identify key decisions — the primary purpose of all HR metrics is to improve people-management decision-making. Prioritize your efforts to provide metrics and data relevant to the people-management matters that need the most dramatic improvement. Clearly label all metrics with the relevant decision that must be made so that the reader clearly sees the connection.
- Include red/yellow/green indicators — it’s no secret that attention spans have gotten shorter. Most executives like to scan over metrics quickly, focusing on important areas or those experiencing significant change. By using indicators equivalent to traffic lights (green = no issue, yellow = watch, and red = action required), you can help them hone in quickly. It’s also an excellent idea to place distinctive colored arrows within charts or data that directly point to key data or inflection points.
- Provide action prompts — all metrics should drive action or change behavior. One of the best ways to ensure that the right action is taken is to include prompts at the end of each chart or metric. Prompts would list the top three recommended actions that if taken could resolve the problem or take advantage of the opportunity indicated by the metric.
In the next installment of this series we’ll tackle ensuring visibility for your metrics, keeping them relevant, and emphasizing the dollar impact of HR metrics.