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Staffing Waste: HR Analytical Tools (Part 2 of 7)

The renowned mathematical physicist and engineer William Thomson, also known as Lord Kelvin, once stated, “If you can not measure it, you can not improve it.” In other words, numbers matter.

Numbers enable us to scrutinize, analyze and draw conclusions about a particular problem. Numbers provide us with a way to develop solutions based on quantifiable evidence. Numbers are the path by which we can achieve analytical literacy.

As your organization looks to achieve strategic success and sustain a competitive advantage, it is imperative that HR professionals bring a new level of analytical literacy to the job.

Conventional metrics such as cost per hire, time to fill, cost per trainee and turnover percentages are insufficient at best for communicating the strategic value and contribution of recruiting departments and the positions they fill. Moreover, these numbers are rarely, if ever, related to workforce performance, a factor that contributes to overall organizational success.

If you’re thinking, “Wait for a second, I’m an HR manager, not a statistician,” don’t abandon hope just yet. Analytical literacy can begin with asking two simple, pertinent questions – specifically, “What matters?” and, “How can I measure it?”

HR Analytics Challenge: Job-Fit Measures

Even in today’s technology-driven world, which makes collecting data cheaper and easier than ever, many well-intentioned, seasoned professionals still make assumptions about what matters in their employee selection process. They still go with their gut. They still utilize opinion versus evidence.

For example, one of our clients in beverage and food retailing had been placing importance on years of experience in hospitality and food service. Analysis of the evidence showed that this screening criterion actually had a negative or inverse relationship with achieving high performance. Another client had been placing value on previous experience in retail banking. The use of HR analytical tools showed this criterion had no relationship to on-the-job performance. You see, while the cost per hire is likely a number you know, the relationship between the candidate’s pre-employment assessment responses and actual job performance may not be as clear. Even with these two small examples, you can easily see the need to approach things differently.

With improved analytical literacy, you would think about the return on investment (ROI) of candidate evaluation as it relates to the successful execution of the workforce’s strategy. You would collect candidates’ responses in the pre-employment assessment process as data that could later be analyzed for possible correlations to front-line goals such as increased sales, higher levels of productivity or better retention.

By improving the use of HR analytical tools and analytical literacy throughout your staffing processes, then both the costs and benefits of your decisions will become clearer. Plus, by providing senior leaders at your organization with talent solutions based upon metrics and analytics, you’ll be able to help them view the staffing process less as an operational expense, but more as a strategic investment. And you’ll be able to increase your internal equity by transforming yourself from that of a traditional HR manager to a valued strategy manager.