How accurately determining what to measure leads to better decision-making Featured

8:00pm EDT April 30, 2013
Lois Melbourne Lois Melbourne

It is amazing to me what gets measured in this world. Just say, Guinness World Records and you are now conjuring up outrageous tales of the biggest, fastest, most random anything.

What about when you need helpful measurements? It is interesting to me where measurements and metrics can go wrong. If you are thoughtful about your objectives when measuring data about your workforce, you will no longer look at all that human resource stuff as being the soft stuff.

Your people expenses are often your largest expenses. The metrics and workforce analytics are also the numbers attached to your only assets with self-awareness. Thus the asset and the numbers associated with them need to be managed even more carefully and in context than your more established management metrics.

Why first … then what

If we understand the goals for the organizations and the struggles the leaders are having, then we can start assessing what information would be helpful toward solving those problems. These conversations require a real dialog to get the best results.

Can you remember when you were a kid and were told to clean your room and you asked, “Why?” The result and motivation were very different if you got the annoyed parental, “Because!” Then if it was explained that Grandma was coming and she was staying in your room overnight, the latter answer received much more care to the details. The same is true when needing to understand why the organization or individual is seeking information.

The right ‘what’

After understanding the goals of your organization, you can design the proper information content and put it into context. Take a look at this real example:

A finance director is concerned about productivity and asks HR for the number of employees in each department. He runs his numbers and produces a cost and profit per employee and compares it to industry standards and his predecessor’s numbers.

He thinks he has the right picture of productivity, but there were several problems in this scenario. The finance director asked for the number of employees, and that is what he received.

However, the data didn’t include the differentiation between full-time and part-time employees, so his number was skewed. He didn’t include the number of contract workers being used in each department, thus he missed 8 percent of his workforce.

He also didn’t get a picture of the trends over time on this number; he just received a single data point. This is a problem because the snapshot in time was right after the busiest part of the season was over, and the student workers were no longer on the payroll, so his numbers couldn’t measure the busy season’s productivity.

How successful do you think his recommendations are going to be based on these numbers? Without context of the information and proper comparisons to the historical data, his analysis is going to be significantly flawed. He was focused on his HR metrics and didn’t focus on the dynamics of the organization’s workforce.

It is critical that the human resource department participate in the analysis of any details involving the workforce. It is also critical that managers and human resources are educated on how to interpret and design their reports. This will make a big difference in your decision-making.

Lois Melbourne is co-founder and CEO of Aquire, a workforce planning and analytic solution company based in Irving, Texas. Visit www.aquire.com for more information.