The Numbers Count Using Metrics to Prove the Value of HR

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1 The Numbers Count Using Metrics to Prove the Value of HR

2 Introduction Ed Doyle Associate Director of Human Resources The University of New England (Portland/Biddeford, Maine & Tangier, Morocco)

3 How hard are you working? I m just sitting around with my feet up enjoying a cup of coffee. Sometimes I have stuff to do but I still find plenty of time to daydream. I m busy all the time and can t find a lot of time to think strategically. I m stressed out all the time! I haven t seen my family in a week! I have a to-do list that is five pages long and seems to grow every day! Strategic thinking? You ve got to be kidding me! I have so many lined up at my door that I can t even get to the dozens of projects I have waiting. I might be okay if people would recognize how much I m working and maybe get me some more help!

4 You Know It. Do they? So you re working hard. Do you think others at your institution recognize that? Sure! They all LOVE HR and thank us every day for our hard work. I got thanked once. I hear exactly what is it you do in HR? more than I hear Thank you. Institutionally it is assumed that I have free time on my hands and I end up with all the tasks that no one else wants to do.

5 How is HR Perceived? Not included in strategic decisions HR is just another cost center A necessary evil Glorified Personnel Department Most of your time is focused on transactional activities and fighting fires. Or Do you have a seat at the table? Looked at more as a valued business partner than a cost center Included in strategic decisions before they have become a problem Are able to plan and implement strategic initiatives aimed at bettering the institution

6 Understanding the Perceptions About HR Stop assuming and expecting that everyone should understand what you re doing and the huge impact it has on the institution Talk to your friends that you don t work with and who don t work in HR Realize that even though you re convinced that a particular initiative will create positive change you still may have to prove it to others Stand in your audience s shoes Know that most people don t understand what you do all day and don t get mad about it Start focusing on being able to prove your worth

7 How Do We Get Past Perceptions and Prove Our Value?

8 The year is 1997 My History With Metrics The year is 1998 The year is 2011

9 Why We Need Metrics Data matters Metrics help answer the whys? Like it or not Colleges and Universities are businesses If HR truly wants to be a business partner we need to act like one Senior leadership loves measurable data and responds less favorably to feelings When it comes right down to it, we are spending a student s tuition dollars and should feel a responsibility to justify our expenditures

10 What Should We Report? That depends Not everything that can be counted counts, and not everything that counts can be counted. ~ Albert Einstein What s important to your institution? What are you trying to accomplish/validate? What is possible? Who s your audience? Ask your business partners

11 Specific Metrics General Information / Demographics Age of Employees (Admin/Staff/Faculty) Length of Service (Admin/Staff/Faculty) Diversity Gender Distribution Home Zip Code Employees by Location Etc.

12 Specific Metrics (Cont.) Compensation Average Hourly Wage (Admin/Staff/Faculty) Comp Ratio Range location Average annual increase Replacement wages Overtime usage Etc.

13 Specific Metrics (Cont.) Turnover / Retention Overall turnover Department level turnover First year turnover Grade level turnover Faculty turnover Administrative/Staff Turnover

14 Specific Metrics (Cont.) Recruiting Open Positions (Faculty/Staff/Admin) Average Days to Fill (Faculty/Staff/Admin) Average Cost to Fill (Faculty/Staff/Admin) First Year Turnover (Faculty/Staff/Admin) Applicant Count Positions Filled (YTD/Rolling 12 Months) Etc.

15 Specific Metrics (Cont.) Benefits Benefits eligible employee count Health Plan participation Eligible not participating Actuarial values Cost Increase Trends vs. Comp Data Enrollment by Group (i.e. EE only, Family, etc.) Participation analysis trends for every plan offered Etc.

16 Specific Metrics (Cont.) Seasonal / Time Specific Metrics Open Enrollment Annual merit/cola adjustments Performance appraisals completed Total comp statements Institution specifics Fiscal Year vacation time used if use it or lose it Federal / State requirements ACA look-back periods Etc.

17 Specific Metrics (Cont.) Other Metrics Employee relations Leave tracking Attendance tracking Admin/Staff to Faculty Ratio HR to FTE Ratio FMLA Data (open leaves, average time away, etc.) Worker s Comp Data (# of claims, average cost per claim, etc.) And many more

18 Specific Metrics (Cont.) Door Metrics Measuring the immeasurable We spend a lot of our time on things that are difficult to measure Managing your door How many times have you gone to work with a plan to get certain things done but left at the end of the day having accomplished none of them? Did you even realize that your day was being taken? How do you take credit for that work? What are the time traps you face? Doing self-analysis of how you use your time can help you be more efficient and effective

19 What to Measure - Need Ideas? There are a lot of sources if you are stumped for metrics ideas Google searches can be very illuminating Ask your HR peers Professional organizations (CUPA-HR, SHRM, etc.) Government Organizations (DOL, IRS, etc.) Ask others in your organization Start to question news stories and business articles you read Where did they get that data? Visit their quoted sources

20 So What? You ve gathered your data and reported it but that s not enough The real key to metrics is to make them relatable to your particular audience and to provide illumination "Most people use statistics the way a drunkard uses a lamp post, more for support than illumination." ~ Mark Twain Raw data is not enough. We need to answer the business whys? How do we go from raw data to information that we can use to make business decisions?

21 How Do We Use Data to Help Make Business Decisions? Trend Data Allows us to give data an internal context Comparison Data Allows us to give data an external context

22 The Value of Trends Trends show the data with a timeline Trend analysis allows decision makers to understand a sense of urgency Undergrad Enrollment Undergrad Enrollment Spring 2014 Fall 2014 Spring 2015 Fall Spring 2014 Fall 2014 Spring 2015 Fall 2015 Trends are difficult to ignore Trends help answer the so what? questions Analysis of seasonal trends can help in planning

23 The Value of Trends (Cont.) Trends often get attention faster than static data - Annualized Turnover in February was 10.6% Response: OK. So? - Annualized Turnover in February was 10.6% that s up 2.1% over this time last year 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 01/14 02/14 Response: Interesting. I wonder why? 03/14 04/14 05/14 Annualized Turnover Rate 06/14 07/14 08/14 09/14 10/14 11/14 12/14 01/15 Admin/Staff Faculty Overall 02/ % 10.6% 8.8% Turnover One Year Ago Admin/Staff % Faculty - 3.6% Overall - 8.5% The Whys? lead to continuous improvement

24 The Value of Comp Data Would you make an offer on a house without knowing recent sale prices of similar houses? If we expect comps in our everyday life then we should expect others to when we present our data Comps help paint the big picture and answer the whys? Comparison data lends credibility to data Whenever possible provide internal and/or external comp data Comparison data provides a context under which the numbers can be understood

25 The Value of Comp Data (Cont.) Comparison data paints the big picture - Annualized Turnover in February was 22.4% - Annualized Turnover in February was 22.4% that s 8.3% higher than the national average for like-sized universities. Annualized Turnover Annualized Turnover 25.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% My University 20.00% 15.00% 10.00% 5.00% 0.00% My University National Average Good comparison data can quickly identify potential issues

26 Comparison Data The Big Struggle The biggest challenge to providing effective metrics is in finding valid and reliable comparison data. We in Human Resources are naturally secretive people The Internet has a lot of data available - unfortunately, it s not always reliable Even if you find a reliable source with related data you still have to qualify it Is it relative to a college/university setting? Is it coming from like-sized organization(s)? Does it need a regional context applied? Ensure you remove your own personal bias from comparison data Does it serve to illuminate or are you just looking to blindly support your message We want to convince but doing so honestly will give your argument credibility

27 Sources of Comparison Data CUPA HR SHRM Peers / Peer Groups List Serves US Census Bureau Worker s Comp Bureaus Your own historical data Department of Labor Participate in surveys! The time spent will pay off! Any others???

28 Putting It All Together How and when do you report your metrics? Regular monthly/quarterly/annual reports Project-oriented timelines Format your presentation in a way that makes it easy for your audience to understand Graphs are usually better than lists Start with a summary but provide detail if your reader wants it Present it to a trusted new set of eyes before your final audience Think about first impressions - there is a value to a beautiful report

29 Putting It All Together (Cont.) To whom do you report your metrics? Senior Leadership Internal HR peers/management Departmental Level reporting Anyone who has a legitimate business interest and the authority to see specific data Individuals (Deans, Vice Presidents, Department Managers, etc.)

30 Hiring in Security Scenario # 1 a) The Director of Security tells you she needs to hire more people so you help them create the hiring request and list a justification of Staff is overworked and shifts are going uncovered. You receive an answer back from the Budget Manager that Security has spent its allotted budget this year and has no ability to hire new staff. You go back to the Director of Security and tell her the bad news. She is frustrated and puts the blame solely on the shoulders of HR for getting in the way. b) The Director of Security tells you she needs to hire more people. You ask her some questions and she says that her people are burnt out and have been working a lot of overtime to cover shifts. You review the overtime data you ve pulled as a part of the monthly HR Metrics report and see that Security has been running very high for the last six months. As a matter of fact, they have been running nearly 70 hours of OT per week! You share that data with the Director of Security and help her complete the hiring request stating that although Security has outspent their budget they have done so because they are paying time and a half for those hours and prove-out that the University can actually save money by hiring a new person. Both the Director of Security and the Budget Manager see that HR is a partner in making the best business decision possible.

31 Scenario # 2 New capital project Recruiting Software a) Your antiquated recruiting process is time consuming and resumes are getting lost. You go to your VP of Finance and tell her you d like to buy a recruiting software with a price tag of $50,000. She says That seems like a lot of money. Why do you need it? You say HR is spending a lot of time manually sorting and reviewing applicants and some are even getting lost. She says How many applicants do we get? You say I m not sure but it is a lot. Etc., etc. End result is you still sorting resumes manually and your VP of Finance worrying that you are losing resumes b) Same scenario but this time you ve done your homework and have metrics to support your request. She says That seems like a lot of money. Why do you need it? You say We received 4,952 resumes last year that we needed to handle manually. That manual handling led to a loss of 825 hours of productivity at a cost of $20,625 for the HR department alone. This technology enhancement will improve our quality, customer service and we will see an ROI in just over two years. End result is you having a new software package and your VP of Finance realizing you are true business partner who understands the value of a tuition dollar.

32 Scenario # 3 Getting Ahead of the Rumor Mill a) The Vice President of Human Resources gets a call from the Provost asking why HR isn t filling open positions faster. You tell him that you think you re filling them as fast as you can. He says that he just heard some frustration from a faculty committee and wants to know what you are going to do about it. You give platitudes but don t have an answer. The Provost is left with the impression that the faculty committee is correct and that HR doesn t know their business. b) Same scenario but you re on top of your recruiting numbers and have both overall numbers and detailed breakdowns by search. You tell the Provost that you are concerned that is the impression because we have actually seen a time to fill trend that has been steadily decreasing over the last two years and that through a lot of process improvements your data shows that we ve actually reduced the time to fill faculty positions by 33 days since the beginning of The Provost says Oh. You direct the conversation to understand where the faculty concerns are coming from (i.e. is it a particular search that s in question, from what does the delay stem, etc.). You tell the Provost that you d be happy to reach out to the Faculty Search Committee for that position and see what you can do to help. The Provost is left with the knowledge that you know your business and put the Resource into Human Resources.

33 When Metrics Support What We Do HR is looked at as a legitimate business partner HR professionals can provide proof of our value to the organization The feeling that HR is just another cost center is irrefutably argued with tangible examples HR gets noticed (in a good way) Credibility increases We prove we understand the mission of the institution and how we support that mission HR processes are improved Needed capital and hiring decisions are more easily supported

34 Metrics There is almost no limit to what you can report through metrics. Good metrics can lead to a need for more detailed analysis. Which can lead to even more improvement. You can t have improvement without always asking why? and providing yourself or others with the answer. If you think it s important, prove it! What measured improves. ~ Peter Drucker

35 Questions??

36 Thank You Ed Doyle Associate Director of Human Resources Please complete the online evaluation form for this session. CUPA-HR will session evaluations to you today.

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