New research from Sage outlines the metrics that corporate leaders want – but often are not getting from their HR teams
What are the top HR metrics business leaders want? What are the vital data points they need? How are they using people analytics to drive business decision-making today?
During the past 12 months at Sage, we’ve been listening to both HR leaders and c-suite executives to understand what they think about HR’s leadership and how HR and people leaders can increase business impact and value in organisations today.
Delivering impact through HR insights
The feedback has been fascinating. We discovered that HR leaders are in prime position to play a greater leadership role in their organisations than ever before, if they can harness the power of people analytics to create bigger business impact.
However, despite an abundance of people data and a growing demand for HR tech, there seems to be a shortfall in the number of HR leaders turning this data potential into real world impact to drive business decision-making in organisations today. We also found a discrepancy between the amount of data being provided by HR, and this data being turned into actionable advice.
In fact, there’s a notable gap between the people data the c-suite say they want from HR, and the data they are receiving. For example, only a third of c-suite leaders say HR are providing basic metrics like headcount, even though an overwhelming majority (94%) want this data.
These are just some of the findings in the second report in our HR in the moment research series, Impact through insights. In this report, we spoke to more than 500 HR and business leaders from across the UK, US, Canada, and Australia in traditionally high-growth high-skill sectors, such as technology and business services, to find out more about HR leaders are delivering business impact in organisations today.
Here’s what we found.
The c-suite’s most wanted HR metrics
What HR data does the c-suite want? When we asked business execs what information they would find most valuable for informing their decision making we saw overwhelming demand for the following metrics. These were the top 15 metrics that business leaders said they want from HR.
- Headcount – 94% of c-suite execs said they wanted this
- Employee productivity rate – 94% of c-suite execs said they wanted this
- Cost per hire (93%)
- HR to FTE ratio (93%)
- Training rates (93%)
- Employee satisfaction (93%)
- Revenue per FTE (91%)
- Turnover rates (91%)
- Labour cost per FTE (91%)
- Cost per employee (91%)
- Promotion rate (91%)
- Average tenure (91%)
- Diversity percentage (91%)
- New hire failure rate (90%)
- External time to fill (90%)
Yet when we ask whether they are receiving this type of data from HR, major gaps appear. For example, while 90% of the c-suite say hire failure rate data would be useful, only 14% say HR is providing this data.
Similarly, 93% of the c-suite would find employee satisfaction rate data helpful, but only 25% are being given access to it by HR and people teams.
Missing data – or the wrong data?
Why the disconnect? Delivery of data doesn’t appear to be the issue; 94% of business leaders say they have access to some form of people data from HR.
It could well be that the data being delivered isn’t being turned into actionable insights: 68% of c-suite leaders say they’re not heavily reliant on HR data, and 40% are not fully satisfied with HR’s ability to provide insights and recommendations as a result.
Also, when we look more closely at the data the c-suite wants, the responses point to the usefulness of ‘leading metrics’ – forward-looking data that helps business leaders make inferences about the future. We discovered the majority (70%) of HR leaders are not providing leading metrics to the c-suite but are instead more focused on delivering ‘lagging metrics’.
Leading versus lagging metrics
Lagging metrics are outputs from events that focus on what’s already happened. They’re useful if you want to understand if certain, intended results have been achieved, but not so useful when trying to predict future trends.
HR analytics can drive critical decision-making – with the right support.
For example, lagging metrics includes data like vacation days and the number of interviewees per hire. Leading metrics, on the other hand, show the state of things now and includes data like employee engagement and satisfaction. This information can be much more empowering because it allows businesses to adapt, and course correct in real time.
Having future-focused data is critical for businesses if they want to be resilient in uncertain times, and HR is in a unique position to deliver just what organisations need.
If employee satisfaction rates are low, for example, productivity is likely to be low too, and this may also lead to higher attrition rates. Spotting a dip in employee satisfaction early enough can help a business find out what is going wrong and fix it before it has an impact on the organisation more widely. This is how leading metrics can help leadership identify potential issues before they become bigger problems.
These kinds of leading metrics are available to HR, so the question is why aren’t they getting through? Worryingly, our findings show 59% of HR leaders don’t have the ability to spot trends that help make future people related decisions, with a third (32%) unable to make data driven recommendations at all.
This trend seems to follow on from one we identified in a previous research report which found that although 76% of HR leaders said people analytics skills are important, only 28% of HR leaders rated their skills in this area as ‘expert’.
Is the data there, but HR and people teams struggling to analyse it, get real insights, and share these across the business to impact decision-making? Our research seems to suggest this is the case.
HR must seize the opportunity
These findings show there is a significant need for more investment in HR training and technology to help HR leaders fulfil their potential and provide the kinds of insights the c-suite need most.
We know that 59% of HR leaders say they have started to deliver a more influential and leadership role, because of their efforts throughout the pandemic, so now is the time to cement this progress, and seize this opportunity to lead, long-term. Actionable insights from people analytics, our research shows, is the key to all this.
In the words of Josh Bersin: “People analytics has grown up – it is now an established discipline in businesses. Data and analytics literacy have become an imperative for HR professionals. So, HR professionals out there: it’s time to become data geeks.”
HR and people leaders, over to you.
To find out more about this research and read all the critically important findings in full, download the research report HR in the moment: Impact through insights, today.
Jessica Fuhl is one of the authors of the research report HR in the moment: Impact through insights. Previously a full-time journalist and former head of digital for the UK Treasury, Jessica has a keen interest in macroeconomics and productivity, and has had work published in the Financial Times, Forbes, and several HR trade publications.