Strategic Business Intelligence for HR:

6 HR Metrics No Executive Should Be Without

Byanalyzingandreportingonthefullrangeofhumancapital management(HCM)data,businessintelligence(BI)uncoverstheinsights executivesneedforsmarterstaffing,planning,andbudgetingdecisions.

Withtherightmetrics,HRcannotonlydeliveradditionalvalue,savings, andincreasedproductivitytothebusiness,butalsocanmoreclearly articulatetotheCEOandexecutiveteamthevitalroleHRplaysin businesssuccess.

n an economic climate characterized by cost-cutting and increased regulatory requirements, HR faces growing demands to communicate the value it creates in ways that CEOs can better appreciate. That means moving away from soft measurements such as improvements and adopting quantifiable metrics similar to those executives use to monitor the overall business. Meaningful HR metrics can include things such as recruitment costs, employee retention rates, and employee satisfaction metrics. BI enables HR to proactively improve performance, analyze critical HR data, and explore different workforce metrics. Here are some of the most valuable strategic metrics that BI tools can deliver to HR: Turnover Analysis: Keeping Your Best and Brightest Employee turnover costs can range from six to 36 months of salary and benefits. To increase retention rates, companies must proactively identify factors leading to turnover. BI can consolidate and monitor factors such as location, department, seniority, gender, supervisor, salary, promotions, and skills and analyze their impact on turnover. These analytics help companies create a profile of at-risk employees and prevent attrition. Level-Setting Compensation Top organizations know performance-based compensation is highly effective in attracting and retaining outstanding employees. BI helps HR design benefits and policies by correlating compensation with performance targets, skills, seniority, and other factors. For example, an HR executive can analyze compensation across a variety of dimensions (e.g., department, location, gender, or seniority) to determine if it is competitive. The result: lower turnover and recruitment costs. Reducing Unnecessary Overtime Expenses In many industries, overtime can be a major component of operating expenses. But BI can significantly reduce OT by identifying potentially inefficient or duplicate scheduling as well as seasonal spikes. BI tools for human capital management enable HR to analyze and minimize overtime hours and costs by department, organization, job, location, supervisor, month, or other factors and determine where scheduling adjustments and staffing/shift changes could decrease overtime costs. Cost-Effective Benefits Analysis Employer-paid or subsidized benefits are a major cost center for

BIenablesHRto proactivelyimprove performance,analyze criticalHRdata,and exploredifferent workforcemetrics.

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most companies. To ensure an organization offers the most costeffective plans, it must have a complete picture of the true and full costs to the business as well as employee participation levels by location, benefit plan, organization level, and other criteria. The right BI tools, integrated with an HRMS/payroll solution, can make providing these metrics a breeze. Recruiting Top Talent Whether its newspaper ads, agencies, job fairs, or employee referrals, companies invest heavily to attract top talent. How can an HR professional assess if that spending is attracting the right people? Many HR departments calculate their average cost-per-hire. However, this tells only part of the story. With BI, HR professionals can measure recruitment efforts based on the time required to recruit. From there, they could easily calculate the time, money, and recruitment method to recruit a specific employee, and correlate these metrics to the employees performance. The HR department might find one method attracts more job candidates in a shorter time or at a lower cost, but that the people are not as highly qualified as those identified by another recruiting channel that costs more or takes more time. In this way, the manager can see which methods deliver the highest-quality candidates. Optimizing Training and Development Investments The investment companies make in employee development can be among their highest line items$56.8 billion for U.S. companies last year. Companies need to know if those investments are producing tangible returns, such as increased sales or greater productivity. Whats more, HR departments must identify current skills and anticipate future gaps, and allocate training resources to ensure optimal productivity. With the right BI tools, HR managers can measure improvements in employee performance and the effectiveness of training programs as it correlates to training costs. Conclusion The right BI tools can empower HR executives with visibility into how they can contribute to improving the companys bottom line. With the right metrics, HR can not only deliver additional value, savings, and increased productivity to the business, but also can more clearly articulate to the CEO and executive team the vital role HR plays in business success. But whats the key to finding the right BI tools? HR professionals need BI tools that are delivered fully integrated with a unified HRMS, payroll, benefits, and talent management solutionso that the BI tools can analyze and report on all areas that impact HR not just benefits or recruiting alone, for example. To find BI tools that can analyze any component of human capital management most efficiently, look for an end-to-end HCM solution that includes built-in BI tools out-of-the-box.

HRprofessionals needBItoolsthatare deliveredfully integratedwitha unifiedHRMS, payroll,benefits,and talentmanagement solutionsothat theBItoolscan analyzeandreport onallareasthat impactHR.

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For more information, please visit www.ultimatesoftware.com.

Ultimate Software is a leading provider of comprehensive HR, payroll, and talent management solutions. Ultimates award-winning UltiPro includes recruitment, onboarding, benefits, payroll, performance and learning management, business intelligence and robust reporting, compensation planning, plus time and attendanceall through Web-based SaaS with self-service for administrators, executives, managers, and employees. Ultimate has more than 2,000 customers representing diverse industries, including such organizations as Adobe Systems Incorporated, The Container Store, Culligan International, Elizabeth Arden, Major League Baseball, The New York Yankees Baseball Team, and Ruths Chris Steak House. 2010 Ultimate Software Group, Inc. All rights reserved. The information contained in this document is proprietary and confidential to The Ultimate Software Group, Inc. No part of this document may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, for any purpose without the express written permission of The Ultimate Software Group, Inc. No part of this document may be extracted and/or used out of the context of the full published document for any reason. This document is for informational purposes only and is subject to change without notice. Ultimate Software makes no warranties, express or implied, with respect to this document or any statements contained therein and specifically disclaims any warranties including but not limited to those for a particular purpose. This document contains or may contain statements of future direction concerning possible functionality for Ultimate Softwares products and technology. Ultimate Software disclaims any express or implied commitment to deliver functionality or software unless or until actual shipment of the functionality or software occurs. UltiPro is a registered trademark of The Ultimate Software Group, Inc. All other trademarks referenced are the property of their respective owners. January 2010

2000 Ultimate Way Weston, FL 33326 1 800-432-1729 www.ultimatesoftware.com ultiproinfo@ultimatesoftware.com

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