I’ve developed a workshop that a colleague of mine is conducting tomorrow on the importance of human resource business metrics, beyond the classic “time to fill”.  As I wrote in the workshop related to the Time To Fill metric…“however measuring the number of minutes it takes to cook dinner never tells you whether the food was actually ready by dinner-time, any more than knowing the time duration of a flight tells you whether it arrived at the game on time…”

The workshop explains how using better business metrics will get the attention of the CEO and CFO.  Instead of talking h.r. speak, I am encouraging my colleagues to put the metrics into dollars and cents.

For example, instead of calculating turnover percentages, add one variable and calculate turnover by average tenure.  New employees take months before they are producing at the same level of more experienced workers.  So knowing how many employees are leaving before ninety days of tenure allows you to put a real ROI measure in place.  The goal is to have employees take longer to leave… yea, that’s right, you would rather have an employee leave at three years than three months.

It sounds a little contrarian,  but when an employee stays three years with your company you are getting full productive value out of them for nearly two and half years.  Your three month investment in their initial training has paid itself back ten-fold.  Not a bad investment, certainly better than if the employee leaves within three months or even a year.

How about another one.  Instead of only calculating the cost of turnover, why not calculate the Vacancy Rate Cost.  What is critical is determining the cost for having work completed that would have been performed by the former employee or employees, less wages and benefits that aren’t paid for the vacant position.  By concentrating on Vacancy Rate Cost, h.r. is showing the company a “real dollar figure”, one that can’t be argued about.

By determining how turnover impacts productivity,  how vacancy rate costs impact the bottom line, and how tenure impacts the cost of turnover, h.r. can be more of a business partner with the organization.

Fun, huh?