Unlocking human power: Major changes in HR metrics

Following a painful year for businesses, communities and people around the world and GCC, some say a new business HR economics is on the prowl protecting us from repeat seismic shifts in revenues, costs, and resources. Some say these "beasts of business economics" will eat traditional HR for breakfast.

Business gurus now predict major trends in "business HR metrics" to serve and protect businesses. Did you know that leading business software and service companies already invested widely, deeply in human resource and human capital applications based on smart Business HR Metrics. What will be metrics? What should we know? Here are three "mega-trends" in business HR metrics which are already affecting the GCC.

Mega-trend 1: New techniques, new roles

There are new terms tools and techniques such as Workforce Analytics, HR Analytics, Talent life cycles. Get to know them or get left behind the caravan. Within HR new roles are emerging. Just as in the last century DP (data processing) Departments became IT, then information systems, we will see new roles and titles and indeed careers like "Head of HR Metrics" reporting to CTO's (Chief Talent Officers)

Mega-trend 2: Global growth, global dominance

Five years ago HR metrics and talent technology hardware and software measured in terms of external vendor spend was at about $3 billion (Dh11.03 billion) globally. In 2010 this has been adjusted to $8 billion-10 billion. These patterns have been reported in the Gulf press recently. Compound annual growth rates of 15-20 per cent are predicted. It now seems that HR executives without metrics will be seen to be like pilots flying without dashboards.

Mega-trend 3: Which metrics are best?

There are three types; tactical, strategic and market metrics. Tactical HR metrics are real time and short term. They are immediate efficiency metrics. For example, in recruitment, these would be time-to-fill, time-to-start, cost-per-hire, offer-to-acceptance rates, quality of hire, source of hires. In reward, these metrics are total revenue to total compensation, often breaking this down to ratio by job families. In Training, it includes numbers trained per time period, time to train, training efficiency, learning retention, cost per day, percentage meeting target competency levels, cost per participant, time from training to required field performance levels.

Strategic HR Metrics are longer term, investment value based effectiveness metrics. They are output metrics; the "so if we spend this on HR what does the business get" metrics. We would expect this to be top line / revenue growth, gross / net profit, margins. We expect to see customer and employee engagement outputs to resulting from HR inputs. Few companies globally do this, yet CEOs and CFOs will, and soon.

Market HR metrics are very much less well known; market analysts' HR indicators, the ones they use for predicting value creation, partly intangible, fully applied. These include: Leadership quality/credibility, brand positioning, talent quality (TQ)/bench. There is increasing public scrutiny around these HR value drivers for specific business. One thing is for sure — Gulf business is here to stay big time and Gulf Business HR Metrics too. Are you?

Vernon Bryce is managing partner at Kenexa Middle East