Lisa Brown MortonPresident & CEO
HR Metrics for Nonprofits and NGOs
Why HR Matters
Its a Matter of Money
Defining HRs Value: Metrics & Results
What is Working in Your Organization/ Q&A
If HR is going to survive in any organization, it must create substantial value with similarly concrete results.
Why Does HR Matter?We manage the flow of people and the ways people enter, move through and leave our organizationsWe help monitor performance management, standards and rewards that reflect stakeholders' interestsWe help manage the flow of information within our organizations so people know what is happeningWe help to define the flow of work, including processes and accountability
Most importantlyWe help to ensure our organizations deliver on their missions to the communities they serve
HR Brings ValueAttraction and retention of top talent from diverse backgroundsCompensation practices that are fair and reasonable given your organizations available resourcesMinimization of increased costs associated with employee benefitsElimination of unnecessary legal exposure associated with dismissals, restructuring and redundanciesHealthy workplace culture where performance management concerns are addressed in a timely, constructive, proactive mannerFostering of individual professional development that facilitates engagement, career development and optimum productivity
Its a Matter of Money
HR is a source of competitive advantage!
Why Its a Matter of MoneyKey Question:Does the culture and work environment of your organization, and the management of its staff, inspire key stakeholders to support your mission, vision, products and services?
HRs Strategic ValueCan you make the connection between HR, mission delivery and the level of profitability or financial sustainability that your organization realizes?
Tips for Building HRs Strategic ValueFocus on AND communicate how you can deliver diverse talent needed to fulfill organizational mission, vision and goals Know and understand your organizations sources of revenue and the flow and impact of those sources on operations/programsTake courses on accounting fundamentals and financial planning/forecastingEstablish a strong partnership with your CFO and CDO
Tips for Building HRs Strategic Value ContdIntentionally contribute to critical thinking about organization practicesTie expected HR outcomes to your organizations overall strategic planTranslate HR concerns/challenges into dollars; communicate the costs of doing nothing
The HR-Funding ConnectionHR Impact & Results
Funding OrganizationalPerformance & CommunityImpactEmployee Commitment &Engagement
Defining HR Value: Metrics & ResultsWhat Gets Measured, Gets Managed
Why HR Metrics Matter
HR metrics are about more than data and quantitative measurement; they are about information information that leads to the investment in people and people-focused initiatives.
Questions to Ask When Defining HR Value & Choosing MetricsWhat are the capabilities that my organization must have to create services/programs that result in our supporters' taking money out of their wallets for us? Are there skills and abilities of our staff that will enable us to understand and respond better to short-term and long-term demands of the communities that we serve?Is our investment in HR practices delivering impactful results for staff, leadership and the community? Does our HR strategy set an agenda for how we will help our organization succeed?
Defining HRs Value in MetricsDO use HR metrics for:
Development of strategyBenchmarkingComplianceAssessment of organizational/department goals/effectiveness
Defining HRs Value in MetricsDo NOT use HR metrics:
To report on information that is relevant to only to HRThat do not contribute to overall decision making or organizational strategyThat focus solely on the expense components of HR
Outcome, Purpose & Results of HR Metrics
Improvement in organizational development, effectiveness & competitivenessIncreased productivity Increased employee satisfaction/engagement Improved return on investment (ROI)
Two Types of MetricsHuman capital metricsMeasure the optimization of the human capital of the organization
Human resource productivity metricsMeasure the ability/efficiency/effectiveness of the HR function to do its tasks (generally administrative)
Common HR MetricsEfficiency Measures Cost per hireTime to fill vacanciesBenefit Costs Per EmployeeAbsenteeismTenureEffectiveness MeasuresEngagement/Satisfaction RatingsTurnoverImpact MeasuresYield Ratios (recruitment sources)
Higher-performing companies are more apt to measure talent-related metrics than lower performers.
Source: The Productivity Blog
Metrics in High-Performing Organizations
Using Metrics to Communicate HRs Value
Understand the key factors driving our organizations and then identify how HR impacts/contributes to those business goalsRemember that quantitative information (metrics) is a common language that all leaders understand and consider credible. Measure what leadership cares about, not what HR cares aboutCreate appropriate, relevant metrics that measure results of how HR contributes to our organizations business strategy or strategic planLess is more; more metrics more valueCommunicate results and impact to all key stakeholders (Management, Board, Staff, Donors, Funders) on a quarterly, semi-annual or annual basis. Create an annual HR Report mirroring your organizations Annual Report
HR Metrics Avoiding the PitfallsGet input from your operations/programs leadership on how they think HR contributes to their successSpeak with finance about measures to use and which metrics would be bestStart smallIdentify one to two metrics that will communicate HRs impactIf you dont have the resources to collect data for the entire organization, focus on a smaller department/program/grant. The results will energize you to do more next timeKeep asking yourself how you can translate HR metrics as contributions to business strategy
About UsNonprofit HR is a full-service consulting firm specializing exclusively in meeting the human resources needs of nonprofit organizations. We partner with the countrys leading nonprofit organizations in areas such as talent acquisition, executive search and consulting, all with the objective of making the nonprofit workforce the best it can be.
www.nonprofithr.com | email@example.com
Copyright 2014 Nonprofit HR Solutions, LLC. All rights reserved.
********One of the easiest measures to collect is the efficiency of the HR function and how well it performs its primary tasks. Metrics to measure the efficiency can include cost metrics for the function, such as headcount ratios, time to fill, average turnover, etc. While these metrics provide a description of what occurred in HR, they do little to translate the value of the metric (low turnover, reduced time-to-fill) to financial or business-related measures.Effectiveness measures focus on whether HR programs and practices have the intended effect on employees or talent pools to which they are directed. For example, in training and development, the effectiveness of the training is measured not by whether employees build needed skills by participating in training programs, but by whether this training results in enhanced job performance.Impact measures directly relate the value of an HR program or activity to the strategic business goals. It is the best measure to show strategic contribution. Usually the actual metric involves a number of computations to demonstrate a contribution to the business goals and may actually include efficiency or effectiveness measures in the calculation. For example, if the strategic goal is to grow major donor revenues by 25% for an upcoming year, then HR would want to communicate how its recruiting program contributes to that particular goal: instead of communicating by how many days the HR department was able to reduce time-to-fill, compute the revenue amount the recruiting program was able to increase by having development staff start sooner.