RBL Institute
Key HR Metrics:
Measures That Drive Decision Making
JOE GROCHOWSKI & KEITH LAWRENCE
THE RBL INSTITUTE | MINI FORUM WHITE PAPER | JANUARY 2014
Participating RBL Institute Members:
Purvi Patel, Applied Materials | Nadine Maschika, BASF | Sunny Patel, Cardinal Health | Prema Ratnasingam, Dell | Vlad Gogish,
IBM | Laura Hartung, Kraft Foods | Virginie Pascal, Mars | Placid Jover, Unilever
EXECUTIVE SU M M A RY
Numbers are the language of business. How and what we
measure drives decision-making and ultimately impacts the
direction of the firm. Data in today’s world is plentiful; we
usually have more information than we can use or process.
Identifying what we measure and how we measure is critical
to success. Because of the significant impact human capital
has on business success, HR plays an increasingly important
role in helping measure “the right things” and to bring new
insights to the table around talent, leadership, and culture.
KEY QUESTI O N S A D D RESSED
During this “Mini Forum” call we addressed two key
questions that are critical to developing the capabilities to
measure performance and influence the business:
•  What key HR metrics/data are you tracking in the HR func-
tion? What is the HR function focused on measuring?
•  How are you using key HR metrics to drive decisions
around talent, leadership, and culture?
INSIGHTS FRO M TH E D I SC U SSI O N
•  Companies are increasingly recognizing that competitive
advantage can be driven by distinctive analytical capabili-
ties.
•  Innovative organizations also see that competing for and
with human and organization capital is vital to sustained
success.
•  Good analytics starts with measuring what is truly
foundational to business success. There is a massive
Key HR Metrics | TheRBLGroup ©2014
amount of data that companies can spend time and energy
collecting, reporting on, and running through sophisticated
analytical models, but it all begins with identifying what is
going to have an impact on the business.
•  Building a robust HR measurement and analytics capability
is a journey of change. It begins by building excitement
among line leaders about what is possible and then building
the organizational capability to fully leverage new insights
throughout the organization.
W H Y I S DATA & M E AS U R E M E N T S O
I M P O R TA N T TO T H E B U S I N E S S ?
Organizations are “competing on analytics” (Reference: Tom
Davenport) not just because they can (organizations today
are awash with data and data scientists who crunch the data)
but also because they need to in order to survive. At a time
when firms in many industries offer similar products and use
comparable technologies, business processes are among the
last remaining points of differentiation.
Today (current state):
•  Too many decisions – both major and everyday – are based
not on facts, but on “gut feel.”
•  Organizations are awash with data but just scratching the
surface of putting it to predictive use.
•  Businesses have mapped their processes and information
flows, but not their decision points.
•  Few organizations are systematic about decision-making.
Organizations such as Amazon, Harrah’s, and Google are
successful in their fields by deploying industrial-strength
analytics across a wide variety of activities. Amazon’s success
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in leveraging its data capabilities to radically transform
industries is well known. Harrah’s improved its customer
loyalty program using analytical capabilities. Even sports
teams such as the Pittsburgh Penguins Hockey Team in the
United States have applied analytics to help them win the
Stanley Cup in 2009.
Having the right data not only enables HR to evaluate the
effectiveness of its work, but it also equips HR business
partners with sound, data-based insights they can use to
influence their leaders. This capability turbo charges the
functions transition from becoming only a provider of services
to driving improved business performance.

WHY IS THIS A REA I M PO RTA N T TO H R ? W H AT D O E S T H E J O U R N E Y LO O K L I K E ?

To be able to influence the business you must know
the current state of the business. This happens through
measuring performance. Most functions (such as sales, supply
chain, etc.) have rigorous systems in place to track their
results as well as the rate of return on the investments they
make (such as the impact of a dropping an additional coupon
on increasing the sales of Persil detergent). Today most
businesses cannot make decisions about people with the
same rigor, logic, and confidence as they do about technology,
customers, or products.
Based on experiences in several companies there are four
distinct stages in the evolution of building a robust Human
Capital Analytics Capability. Measurement plays a key role,
particular early on in the first stages (refer to Figure 1).
Stage Zero: Decentralized & Disorganized
For many years this was the situation that most companies
faced. Data concerning people was dispersed across the
organization in many different places and formats. Countless
items were tracked based on a belief that they were either

Business leaders are increasingly looking to HR to stop important or required for compliance purposes.

reporting only “what has happened in the past” to showing

Stage One: Building Infrastructure
them “what should we do in the future” to have business
Getting line leaders to see the value in better HR data and
impact (hiring the right people in emerging markets to
analytics is “Job One.” Their support to both build this
grow, pinpointing and promoting the best leaders, targeting
capability and use it is essential to success.
compensation increases for the top sales people, etc.).

Figure 1: Human Capital Analytics Evolution

H U M A N C A P I TAL ANALY TICS EVOL UTION

Prescriptive

Descriptive

Stage 0 Stage 1 Stage 2 Stage 3

•  Dispersed data
•  Decentralized databases
•  Many measurements
•  Ad hoc reporting
•  Intuitive decision-making
•  Reactive HR Leaders
•  What measures “really •  HR Leaders trained in HR •  Automatic data deposit
count” Analytics and retrieval
•  Data organization / •  Review of HR insights •  Streamlined reporting
collection with business leaders •  Cross-correlation analyses
•  HRIS selection and •  Strategic planning based •  Data-based decision-
installation on human capital analytics making
•  Analytics team creation •  Predictive modeling
•  HR scorecard
•  Partial data-based
decision-making
•  Awareness and
appreciation for value of
analytics
courtesy of Ken Carrig

Key HR Metrics | TheRBLGroup ©2014 2

Once the opportunity is identified on how better data can
drive business success, efforts are initiated to “get organized.”
Having solid transactional HR data is the foundation. This
includes:
•  Creating a dedicated experienced analytical func-
tion. Their mission is to focus on creating the capabilities to
effectively collect and mine HR data. These human capital
“data scientists” not only need to be experts in their field,
but they must also understand the business and be able to
effectively translate the results of their work into something
usable by business leaders.
•  Defining the critical data needs and data standards.
This includes choosing HR metrics wisely and consistently
defining them (like employee attrition). Today virtually
everything can be counted. The question is “what really
should be counted?” Traditionally HR has a lot of operational
metrics that be overwhelming for leaders to consume.
Some companies such as Unilever are placing particular
attention on limiting the number of KPIs and focusing on
what really matters and is aligned with business outcomes.
Applied Materials narrowed the list of metrics/KPIs from
the 100’s to the top 7 focused on alignment with business
leaders.
•  Building the system to collect and use the data.
Ideally this is a single, robust technology solution that
integrates the many work streams within HR (such as
payroll, benefits, training, etc.). In addition, user-friendly
applications must be created for end users (HR business
partners and line leaders) to be able to readily access and
use the data in their daily work. Most companies noted they
have a regular (such as quarterly) review of their scorecard
with business and HR leaders.
•  Dell recently rolled out a toolkit to both HR and line
leaders (in partnership with Finance) to help them with
assessing labor costs, managing employee performance,
etc.
•  Applied Materials delivered specific dashboards to
HR (in partnership with Finance) to help understand
labor cost.
•  Maintaining the system. Ensuring data integrity is
critical to the success of this endeavor (“garbage in garbage
out”). Nothing will undermine the credibility of this entire
effort in the minds of business leaders more than bad data
they don’t trust. Have a rigorous set of quality controls and
clear accountabilities are essential.
Member companies on our “Mini Forum” discussion reported
a fairly consistent set of metrics (both enterprise wide and
within HR operations) they are focusing on. They typically fall
Key HR Metrics | TheRBLGroup ©2014
into six main buckets:
1. Organization: total head count (current & forecast), pro-
ductivity, span of control, number of layers, etc.
2. Talent & Performance Management: recruiting
(number, source, cost, recruiter effectiveness), diversity,
movement, employee performance/ratings, annual
employee discussion completion, expatriate numbers and
costs, employee attrition (who is leaving and why), etc.
3. Capability: skills and learning (number of people being
trained, the effectiveness of the training & development,
number of hours and costs invested), etc.
4. Culture: employee engagement, culture assessment,
“Voice of the Employee,” etc.
5. Rewards & Recognition: compensation, benefits use
and costs, etc.
6. HR Operations/Productivity: HR head count, costs,
customer feedback on services provided, etc.
Stage Two: Mining The Data
Once the data warehouse and extraction capability exists
the opportunity presents itself to take full advantage of the
investment made to date. Analytics (the use of data, statistical
and quantitative analysis, explanatory and predictive models)
plays an important role in this stage. Major steps include:
•  Assessing the HR function. This includes looking at the
efficiency of operations (such as HR headcount as a % of
total headcount) as well as opportunities to improve the
impact of efforts (such as training).
•  Providing scorecards of current performance. For
example, BASF has a Talent & Diversity Dashboard that has
been very effective in driving different leadership actions
on people. Having the data readily available took a topic
that used to be seen as “fluffy” and made it just like other
business reports they are used to seeing (“black & white”
and actionable). Cardinal Health has dashboards for
each of the HR Centers of Excellence, with some that are
enterprise wide and others that are targeted at segmented
populations. Mars is using their talent scorecard to ensure
they have the “Best People in the Best Role.” Applied
Materials uses dashboards to measure the effectiveness of
their talent and career development initiatives/programs.
•  Identifying correlations. For example, at Procter &
Gamble a pioneering HR analytics effort identified that the
majority of employees who quit did so in the first three years
with the company and were in jobs that didn’t play to their
strengths.
•  Developing predictive tools. For example, Facebook
can predict who is at risk of leaving based on the type of
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 words they use in their social media postings. And IBM HR
has developed a patented proactive retention solution in
combination with IBM Research.
•  Performing organization modeling. At Disney they
uncovered that the role that was most critical to the guests
having a wonderful experience at their theme parks was
the grounds sweepers (not the Disney characters or ride
operators). Unilever uses forecasting to appropriately
adjust plans based on what changes are occurring by
function, region, etc.
Stage Three: Driving Improved Decisions
A growing list of world-class companies are posting success
stories in using analytics to drive their business as well as
human capital capability. With new insights in hand HR can
partner with line leaders to make better decisions about talent,
leadership, and culture. For example:
•  Google has determined that GPA and interview perfor-
mance are poor predictors of on-the-job success and tran-
sitioned to using an algorithm compiled by identifying the
characteristics of their best performing employees.
•  BASF is reimbursing employees who participate in
wellness efforts based on feedback from the employee
survey on work-life balance.
•  IBM is using social media to engage new hires even before
their first day on the job to facilitate their transition into the
IBM culture. Along with providing coaches, this enhances
new hires’ productivity as they learn to use social business
tools, which are increasingly becoming the standard way to
get work done.
•  Kraft Foods is using data to build an organization that
lasts and advance their new culture. For example, they are
projecting out future retirements and using these insights
to identify critical roles that will need to be filled. This
data is driving the focus for the Talent Acquisition team.
Additionally, to support the culture change, behaviors
of their senior leaders are being assessed and fed into
their annual performance review, and feedback from their
employee survey helps identify areas for business process
simplification.
•  Mars assesses new hires after six months on the job versus
their adherence to the Five Mars Principles. They also
aggressively take action on associate engagement scores
given their criticality to the business success.
•  Unilever is using forecasts of attrition to proactively
influence sourcing plans. For them, the future includes
looking at modeling the cost of appointing different
leaders (“what really is driving performance?”), where does
Key HR Metrics | TheRBLGroup ©2014
employee engagement really matter, who would be a great
leader in a particular geography, for example.
The key is to correlate what we do to an important business
imperative and to be able to present a simple compelling case
(“a story”) to engage line leadership.
CO N C L U D I N G T H O U G H T S
“Big data” is in vogue. But whether the data is big or small, the
key is finding and focusing on the HR metrics that will help
you intervene and have an impact on a business decision.
The full potential of what will be possible is truly unknown at
this point. Measuring the right HR factors and building the
capability throughout the organization to fully leverage new
insights to drive improved decisions is vital to survive. Many
companies are well along the road in this journey and had
these “words of wisdom” to share based on their experiences:
•  Engage the business. HR must not be working in a silo.
We must be highly tied with what is important to business
leaders and what we can bring to the table to share strategy
and decisions. Partner with other key functions such as
finance and IT.
•  Recognize it is a Journey of Change. This begins
with building excitement of what’s possible and then the
capability to bring new insights to the business.
•  Be Focused. There is a big universe of information. Pick a
critical few metrics and start there.
•  Make it Easy to Use. Enable leaders to get ready access
to key information that will help them do their jobs better
and see the value that “smart measures” bring to the
business.
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