On my previous blog titled: Why technology is important to save HR costs and affect the bottom line I tried to explain the importance of metrics in the HR function to better position a company in the recruitment process.
I am not by any means an HR technologist, the reason of my interest is that at a previous place I worked for, it was announced that the Company goal was to grow their revenue up to 1.2 billion dollars in the next 5 years, and I wondered back then how a goal like this would trickle down to the different business departments like Human Resources, IT, Cost, Estimating, etc. It would seem to me that to achieve a goal such as this, all stakeholders should have a clear understanding exactly what would be the way to get there.
It is understood that you will find the measure of the success of any business by looking at financial indicators, but these are trailing indicators, the history after the facts. In the other hand performance key indicators are leading indicators, they will help you better position yourself for the task ahead, and by effectively measuring what is going on any business department will be able to position themselves to achieve the goal ahead. Remember: You cannot manage what you don't measure
For example If the company goal is to hire 50 new employees a year with a delta of 20% increase a year for the next 5 years, and the hiring process is occurring at a 40% recruitment effectiveness index (look at the chart below), it will means that the time to hire and the total recruitment cost must be decreased to reach the company's recruitment goals to be able to achieve the forecasted growth. Obviously like I mentioned earlier, HR is just one indicator in the mix, there are many other stakeholders in the mix.
The Recruitment effectiveness index (REI) is measured as follows (as per Gartner's Business value Model (BVM))
REI=ART*ARC
where:
ART = 1-(Time to hire/365) – Average relative recruitment time
ARC = 1-(Total recruitment cost/1st year compensation) – Average relative recruitment cost
To conclude, it is important that analytics are included as part of any decision making process.
By measuring you will arrive to better decisions
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I am not by any means an HR technologist, the reason of my interest is that at a previous place I worked for, it was announced that the Company goal was to grow their revenue up to 1.2 billion dollars in the next 5 years, vintage pearl necklace , handmade shoes online , anklets for women , embroidered purses and bags , embroidered leather belt , casual belts for jeans , belt boots thigh high , ladies bracelet and I wondered back then how a goal like this would trickle down to the different business departments like Human Resources, IT, Cost, Estimating, etc. It would seem to me that to achieve a goal such as this, all stakeholders should have a clear understanding exactly what would be the way to get there.
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