This transcript was created using an automated transcription service and may contain errors.
The data by itself really means nothing without other variables or goals or comparative data.
Welcome to The JoyPowered® Workspace Podcast, where we help HR and business leaders embrace joy in the workplace. I’m JoDee Curtis, owner of Purple Ink, an HR consulting firm, and with me is my dear friend and co-host, Susan White, owner of Susan Tinder White Consulting, also an HR consulting practice.
Today’s episode is focused on HR analytics and metrics. This came as a suggested topic from a few of our listeners. So we’re always open to getting new ideas. So what do we mean by HR analytics and metrics? Well, it’s the process of collecting, analyzing, and reporting relevant information to make data-driven decisions. So I think that’s really important for us. It’s not just about collecting the data, which I think sometimes we’re like, “Oh, yes, I… I track this ratio,” or “I track…. We have key metrics.” But are you using it to make data-driven decisions? Because the data by itself really means nothing without other variables or goals or comparative data. Are we getting better at this? Are we getting worse at this? Are we… is it typical for our industry? What… you know, what might make sense?
In SHRM’s summer 2023 HR Magazine, there was an article on five key metrics. The author Kate Rockwood suggested that every HR professional should track the following metrics. What I love about what we’re going to share next is that I think some HR folks that I know will say, “I’m just not real detail oriented, that’s just not my strength,” and they can get paralyzed with it, and I think it’s because they look at it as something really overwhelming. I think what Kate has done here in this article is said, you know what, keep it simple. But what are the things that are most impactful to a business? So her suggestions are, first of all, employee turnover rate, the percentage of employees that leave the company. I have to believe that every business leader and HR professional needs to have a handle on that, right? And that’s not complex. The – your HRIS system, I’m sure, is popping that out for you fairly easily. The second one, time to hire, which is the time between creating a job opening and the position being filled. I think you do need to know that. You want to know how long it’s taking you, because that can be impactful on your production, on your sales, and if it’s longer than what is normal in your industry or your community, you’ve got an opportunity to tighten some things up.
The third one is benefits participation rate, the percentage of eligible employees who elect company benefits. You know, if you’re offering things that people aren’t taking, maybe you’re wasting some of your administrative dollars, maybe you’re going to lose people because there’s things you’re missing, so understanding that. I think it’s smart that Kate calls it out. Fourth area in the article is diversity, the progress in hiring and retaining a diverse workforce. This can be based on gender, race, disabilities, veteran status, a lot of other things. And I think an organization that’s truly committed to having a diverse and inclusive and equitable workplace cares about, are we making progress? Are we not? Let’s put – Are we walking what we’re talking? And the final one that she thinks you want to make sure that you have is employee satisfaction. Gallup describes engagement as those who are involved in, committed to, and enthusiastic about their work. I think you do need to understand how happy are you – is your workforce, to know if you’re if they’re going to stay with you and if they’re going to really give you their best. The one I would be careful about is diversity in that the number of diverse candidates hired may not be as important as their tenure with the company. If you hire a lot, they’re walking out the door soon, maybe we… our culture isn’t matching what it needs to be. We could be hiring diverse candidates, but not creating a sense of belonging and inclusion. And also many candidates, employees might not have noticeable disabilities, so you may be reporting that you’ve got so many employees with disabilities, because that might be very much under what the reality is because people haven’t disclosed. So good idea is just to be sensitive that there’s… even as you do data collection, things are not always as they seem.
Right. I also love that Kate brought out those five different simple metrics. Sometimes when we look at the list of types of HR metrics you can have, there can be pages of different metrics. But really the ones that are the five most important metrics are the ones that are most helpful to you, your HR team, and/or to your managers and/or leaders, right? If you’re sending them the turnover rate every week, but it’s really not an issue, it’s not of concern, it doesn’t mean we shouldn’t know what it is, but it might not be the five most important… one of the five most important ones. The metrics themselves and/or the need for metric tracking also might change over time, so keep asking those managers and leaders and start tracking other metrics that might be helpful to HR or to the managers, the leaders. Many times these leaders might not know what they don’t know. Right? It might seem to them that hiring takes a long time, but when you see that hard data, you can see, like, no, really, we’re… we’re pretty quick with this.
And I also like to show them for our industry, you know, it might be 38 days to fill these type of jobs. We’re doing it in 34, and I know it feels like it’s forever to you, but we’re better than than average.
Right. And I think we all – I do this myself, but I frequently hear leaders or managers making assumptions without having good data. Like, I’ll hear people say “our engagement is so much better this year.” Well, why is that? Maybe that’s just your team and not the entire organization, right? Or maybe it’s in your location, but not the other locations. Or you might say we’ve had a lot of turnover this year, but really, is it just one department, is it just one location, or is it overall? And the one I mentioned before about it takes such a long time to get someone hired. On that one specifically, I have a friend who is the head of recruiting for a major national company, and in one of their national meetings, one of the department heads loudly announced to my friend, “What is the recruiting team working on? It takes forever to get someone hired in my department.” But my friend calmly replied, “Actually, our time to hire for the entire company has decreased by 12% in the past year, and we’ve also started tracking that time it takes for different steps in the process to…” you know, she was trying to figure out where are the bottlenecks, if any, “and the average time between when we share the first candidate until the first interview was 14 days,” in his department, or maybe one of the departments, but that the same time in other departments was only seven days. So that really wasn’t on the recruiter that the time to fill was longer than he had hoped. It was on the hiring managers who weren’t moving quickly or getting people on the schedule or prioritize. The leaders really – she said the leaders really took note that she knew those numbers really quickly. And not only did she know the data, but she knew it by department. I know that some organizations have tracked the same metrics for years without any thought to whether or not it is still important. Maybe the benefits participation rate was very low several years ago because your benefits were expensive and maybe you didn’t have very many options, but you’ve really worked on those to make them better, and now that participation rate is 80 to 90%. So that can be an important metric, but again, it might not be one of the top five most important ones now, because you’ve gotten that to a high level. Course, I guess you could also think, like, maybe your benefits are too good, or we’re not charging enough for the benefits. So.
So some examples of how you might understand the impact or the reasons for metrics and/or how this data can really help you. Let’s start with employee turnover rate. You know, when you look at the rate, if it’s going up or if it’s going down, there could be a whole list of reasons, and you do want to dig. I mean, we’ve got the data, but the analyzing around it is where I think you really can take your department and your organization to that next level. If turnover’s going up, what’s changed? You know, really doing a good look back, maybe pulling together a team of people. Where is it in the organization that we’ve got turnover going up? What has changed there? Do we have new leaders? Maybe we’ve got some inexperienced people who haven’t been trained the way they need to. Have we changed something about our orientation? Did we, you know, stop something that we thought wasn’t useful, and all of a sudden, we’re having people not stay as long? Is there any cause or effect that we want to take a look at? If turnover is going up, is it desired turnover? Who’s leaving? Are there people that really needed to go, and maybe we’ve gotten more firm about our corrective action process? In that case, it was, you know, there’s a good reason behind it. If turnover has gone down, what are we doing differently in one area that’s causing that that maybe we want to pick up and lift to put in other places? I think looking at the data, really analyzing it, understand the cause and effect and the why, deciding as an organization, is it helping us move forward? That is really what we, as HR professionals, can do to have real impact with something as simple as turnover rate. Let’s grab another one. Let’s think about time to hire. You know, what’s the story there? Yes, we can watch the numbers. Maybe our average time to fill a non-exempt job is 38 days, and over time, we’re starting to see it become 40 days, 42 days, 48 days, before you know, it gets too far… too far along. You want to stop and think about what’s… where’s the cause and effect? Are we doing something differently? Are our competitors doing something differently? Do we have new competitors that we really need to get a handle on and understand and how do we sell against them? You know, it’s understanding that the why what’s causing it. How do we feel about that? Is it helping us achieve our goals? Is it harming us? And what do we want to do differently? I think it’s really important that you take the time for even these very simple metrics to figure out, how do we manage around the… what we’re learning from them. And then finally, the benefits participation rate. As an example, if we’re finding that the participation rate is lower than we want, or it’s starting to decline, have we introduced new benefits that we haven’t explained very well, or has it been a long time since we’ve had benefit learning sessions that maybe it’s time for us to make sure we pull people back in? Maybe our 401(k) participation rate is dropping, and we know it’s good for our employees, and maybe we need to figure out how do we market it differently or better? How do we educate? So I think it’s really important that you take these five metrics we’ve talked about and say, how do we optimize and maximize the return on us tracking these to really impact the business?
You know, Susan, that the one about the 401(k), I always think of this story when people talk about participation rates. At one of my roles I had earlier in my career, we had a 401(k) plan, that within the plan, you could invest in any stock, any bond, any Treasury notes, I mean, it was wide open. There was no, like, “if you’re retiring in 2035, you might pick this fund,” or… it was just wide open. Well, after I got there and started looking into that, what I realized – and our… our participation rate was low. Right? So the former Retirement Planning Committee, they were people who really understood stocks and investments and watched the market every day, but our participant – our average participants were not as knowledgeable at that, and didn’t they didn’t know where to invest or how to invest, so they were leery about putting any money in at all and feeling that responsibility to manage their own investments. So I suggested that we offer some, you know, some more funds and give them data on it, but also limit the number of options that they had. Our participation rate went up almost 50%.
Because of that. Yeah.
And I can relate to those workers. It’s overwhelming when you have hundreds of options. I would prefer having six. You know, let me pick between six, or let me do an age-based investment thing, because I find it overwhelming.
Right, me too.
Well done, JoDee. Yeah.
So some other metrics that might be helpful to you is your offer acceptance rate. That is taking the number of candidates that accept the company’s offer, compared to how many overall offers did you give out, right? Or are most people excited to take that acceptance, or are they getting better offers from someone else? The absenteeism rate, which is the number of unexpected employee absences in a period of time. And if that rate is growing, what’s happening there? What about the average tenure, and the time an employee stays with the company? Now, overall, we know that tenure has gone down significantly in the past, say, 20 years for sure because people don’t feel like they have to commit the rest of their life to their… their current role. But what do… you know, are you seeing it in certain departments? Is it with certain managers, you know, where…? And how can you figure out some answers on why that’s happening? The participation rate, again, not just for benefits, but in other activities, maybe some cultural initiatives you have or social outings that you might sponsor. You know, why are people participating or not?
Yeah, I like that. You know, I know this has a real HR lens, but for any of our listeners who are, you know, responsible for human resources, I think it’s a metric that I have found very valuable, especially when you’re doing large-scale recruiting, is to really have some type of metric around the source of hire and the tenure so that we know that if you hire people from the college campus, and they’re… the average stay is 3.2 years, whereas if we hire people through employee referrals, they’re staying 7.8 years, or if we’re hiring people from a cold calling… cold sourcing, that they tend to stay 1.8 years. Just really understanding the source of hire really helps, I think, organizations use their staffing dollars wisely, understanding where we’re getting the biggest bang for our buck. And then there’s so many other, you know, types of stats that you can do that are metrics you can keep. I think you said to figure out for your organization, where are your pain points? And if it is retention of employees, then maybe you go a little deeper there. If it is productivity, job satisfaction, if it’s performance, that… you know, people who are better performers, figuring out, what were the circumstances that led to us hiring those individuals so that we can repeat success. I think that you can really just figure out your pain points and that’ll help drive what metrics the organization needs.
And also, just be sure to use data to check progress on your goals. I actually worked for a company for a while who had a very uncommon goal. And that was to increase their turnover rate. Virtually nobody left there, which sounds like a wonderful issue, right? But sometimes we had lower performers who we still hung on to, and the newer, strong, up-and-coming performers didn’t have anywhere to go, and they could see that, like, there’s five managers ahead of me and three directors and four partners, and I’ll never make it to partner. So they would… they might leave, actually, which would increase the turning rate, but it was not… we didn’t want that to be the case to happen. And when I talked to other firms and we shared our turnover rates, they were amazed that our rate was so low, but I said, “Wait a minute, wait a minute, it really is not enough.” So you never know what you know, what is the goal of the company, and are you trying to increase it or decrease it, and what are the examples? Even, you know, we talked about the length of time to fill or time to hire, maybe if your days are really low, your recruiting teams are rushing the process and not selecting the right candidates. Right? That one is a real balance of you don’t want to take too long and lose good candidates, but you have to do enough work to make sure that it’s going to work longer time, too.
Very good point.
And just in general, the analysis of your data can be a huge help to giving an organization the right direction. Whatever analytics you choose to track, be sure to understand the reasons, the goals, the issues, the impacts, and the comparisons and know what are the most important analytics for my organization at this point in time.
So, JoDee, how can tracking these metrics make your workplace more joyful?
Well, I think in a lot of ways, right? Just seeing the improvement. Maybe your goal was to reduce your turnover and you can see that dropping over a period of time and/or maybe be better compared to others in your industry, which can make you really proud or, “Hey, we’re doing the right things,” or “We created some new initiatives for people to help this metric.” So you can celebrate in those accomplishments. And even if you have some that you really need to work on, and the metric is not so good, even just seeing that progress, or being able to say, “Ah, you know, we’ve tried these new things, and they’re working. We’re not where we want to be yet, but we think we’ve, you know, talked to people or surveyed people, and that we’re really on the right track.”
I think you’re so right. And I think the credibility that gives HR to be able to speak to metrics and talk about, you know, what we’re hurting here in this, we have some metrics here that show that we’re not doing well at XYZ, but here’s what we’re gonna do about it. Your transparency, your credibility, I think just skyrockets with your clients, as it should.
All right, well, JoDee, it’s time for our listener question. If you have a constant issue with a department head not obtaining identification for new employees, is this an HR violation and reasonable to write them up for it?
Yeah, so absolutely. I have a few examples on this, that not only it might be a reason to write up – write them up for this, but maybe to terminate them for not holding me accountable. And this… this did come in as a listener question, but I have to tell you, we had a similar situation with one of our clients that owned many, many restaurants, which is known – that industry is known for very high turnover. And they allowed their managers to be the ones to get the I-9s. It wasn’t an HR responsibility, it was the managers. Well, so, as you might guess, some managers were really on top of it. Some of them said, “Ah, you need to bring it in tomorrow,” and then they never followed up with them.
Oh, dear. Yeah.
Yeah. But for I-9 paperwork violations, and actually this – the violation can just be doing one but doing it incorrectly, much less not having one at all, but the penalties can range from $272 to $2,700 for the first offense for one…
…of these violations. But if it’s continued, and there are substantial violations or uncorrected technical areas, those fees can certainly go higher. Specifically in California, a job applicant or employee may file a complaint with the labor commissioner who might impose fines up to $10,000 per violation for this. So these are serious, right? They’re looking for people to make sure you have legal employees working in your country and have valid social security numbers or valid visas to work in the country. But on another note about I-9s, they’re… the revised form I-9 was recently published as of August 1, 2023. And if you’re not using that already, you can Google “I-9 form” or it’s also published on uscis.gov. Sorry, there is a little bit of a transition time, but as of November 1, all employers must use the new Form I-9. You don’t have to go backwards, but for new hires, you need to use it. And basically the change in the form is that the Department of Homeland Security will now allow valid or qualified e-verify employers to use an alternative document inspection procedure when completing the form.
Okay, good to know.
Yeah. In our in the news section today, according to FlexJobs’ 2023 Work Insights Survey of over 5,600 people, they found that 96% of workers believe a remote or hybrid work arrangement would be best for their mental health. A hybrid workplace was reported as the ideal for 49% of workers, which slightly out places a preference for a fully remote arrangement, which had just 47%. So it’s not too far off. But I think I do hear a lot of employers say, like, “My people want to be fully remote.” And I think, do they? Do they really want to be remote, or do they want some hybrid options to do that? But very interestingly, only 4% of the participants that being in an office full-time was best for their mental health. So, you know, we’ve heard this before that… that people want some flexibility, right, to… to be in the office or even if it’s starting and stop work times. But we also recognize that some employers can’t offer this, too, right? If you’re… need to be answering the phones from eight to five or you’re in… you know, a police officer, or… you don’t always have that flexibility to not go in.
Thank you for listening today and make it a JoyPowered® day.
Thank you. If you would like SHRM recertification credit for listening to this podcast, please visit getjoypowered.com/shrm. You’ll find an evaluation of the podcast and once you complete the evaluation, you will see the SHRM recertification credit code and a link to a proof of participation certificate. Again, that’s getjoypowered.com/shrm. Thank you for listening and thanks for your dedication to the HR profession. If you liked the show, please tell your friends about it and let us know what you think by rating and reviewing us on Apple Podcasts.
You can learn more about JoyPowered® at getjoypowered.com. Check out The JoyPowered® Shop, where you can order our books, journals, and other items that power our joy, at getjoypowered.com/shop. We’re @JoyPowered on Facebook, LinkedIn, Instagram, and Twitter and you can email us at email@example.com.
We hope you tune in next time, make it a JoyPowered® day.