In the last year, organisations have been re-modelling themselves to mitigate financial strains and meet the need for new ways of working, and HR needs to be the flagship of productivity.
HR is used to measuring big picture outcomes (absence, staff turnover, employee satisfaction or Net Promoter Score). But that’s not HR productivity – which is the ability of the team to deliver better, quicker services with less resources; in other words, the jobs being done to meet the needs of fast-changing workplaces, to reach those headline organisational outcomes.
Measuring actual HR productivity is going to be increasingly important for building support and backing from board executives: to be the model function in terms of demonstrating cost efficiency and how to rid a business of unproductive practices, but also how essential HR is to organisational resilience. The pandemic crisis has put HR in the front line in terms of supporting wellbeing, engagement, and trust. Now HR professionals need to make the most of that window of opportunity of board attention to show how the function isn’t only there to heal and prevent problems, but to be at the heart of the recovery.
That doesn’t mean just measuring speed and volume of HR transactions. There has to be a balance with quality as well as equality. Every employee needs to have the same access and high-quality level of response from HR services. Provision needs to reflect the reality that different groups of employees will have increased needs in different circumstances, and as the Covid-19 period has demonstrated so vividly, how needs can quickly change.
Improvements in the speed and quality of HR interactions might seem minor in the context of improving productivity of an entire organisation, but evidence suggests that it’s the cumulative effect of small changes in behaviour and practice that have the greatest overall impact. Every employee making a tiny change in their use of time and focus has a huge effect, equivalent to or even bigger than a major, often costly one-off productivity initiative.
Five key metrics for HR productivity
So how can HR productivity be measured to make sure this is all happening? First of all, there has to be a focus on key metrics. The digital transformation of organisations and the rise of people analytics means there is no shortage of data. But no-one wants a barrage of information, fat reports and 30-slide PowerPoint presentations. At the root of all productivity is the principle of keeping to essentials, and metrics have to deliver actionable information.
In HR we tend to have a mindset where datasets need to be comprehensive and perfectly correct. Naturally enough, given the need for supplying data for payroll or different forms of compliance with employment legislation. In the case of HR productivity, there’s a need for snapshots, indicators of trends that can be used as a spur for change or confirmation of good practice. Thinking about metrics needs to start with being clear about the underlying business need in order to focus on the real question that needs to be addressed. Too often HR produce vast data reports that take large amounts of time and resources to compile and are out of date by the time they reach the boardroom. More regular, digestible shots of data are more valuable. Short, simple, and actionable.
HR productivity can be measured in 5 key areas:
-
Time spent on accessing HR information
The proportion of HR time spent answering routine employee questions and requests (also taking into account the level of staff involved) -
Time spent on value added HR
The proportion of HR time spent on strategic, added-value tasks (again, thinking about the extent to which more senior HR staff have been able to focus on their core strategic role) -
Time spent on queries
The time from request to resolution of employee queries -
Service level
Satisfaction levels of employees with responses -
The employee experience
The degree of personalisation of HR services
In this way there’s a simple basis for insight into both sides of the deal: is there efficient practice? Does it lead to real impact for employees as service customers?
How to boost KPI performance
With these measures in mind, HR need to know they’ll be able to perform: show high performance, how they’re improving and been able to adapt to changing employee demands.
The right use of technology is fundamental to everyday productivity. Systems based on digital files and interactions rather than paper. Self-service. But also, better management of employee requests and cases, making sure that any processes involving manual input from HR staff are automated.
Other means of improving performance against productivity KPIs include making sure processes aren’t bogged down in unnecessary complexity and formalities. HR policy should be straightforward for all employees to absorb, practices like performance appraisals and gathering employee feedback should be flexible and accessible, part of an easy frictionless flow of HR support.
When it comes to employee satisfaction and attitudes to HR services, personalisation will increasingly matter. Staff are steeped in the use of digital services - retail, financial and media - that offer smart customisation. So, there are higher expectations from HR that need to be met. At the same time, the growing emphasis on democratisation means both ensuring equality of access to HR interventions as well as customised services at scale across whole organisations, making sure that diversity is both acknowledged and pro-actively targeted. The past year has included powerful examples of why this is so important, for staff working from home needing to juggle work with childcare or other family caring responsibilities; for people anxious about the impact of the pandemic on mental wellbeing; or just those employees who work at a distance from the HQ and feel disconnected from HR and other management initiatives.
One last measure to mention, and perhaps the one that will be more important than any other in the coming years, the one that secures the place of HR in board-level thinking: tracking the relationship between levels of HR productivity and those in the organisation as a whole.
For more information download the "Tackling HR's Productivity Killers: 5 Steps to HR Transformation" eBook.