Metrics Rule

This article accompanies Trust at the Top

Tuesday, November 1, 2011
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As many HR leaders have discovered in recent years, metrics have become a critical part of their job and contribute greatly to their place at the executive-team table and their abilities to converse and relate in meaningful ways.

In The India Way, Wharton professor Peter Cappelli compared the HR data collected by U.S.-based companies against how Indian companies approach metrics.

"Indian companies measure tons more than U.S. -- retention, turnover, morale, absenteeism, training, etc.," he says.

But why aren't U.S. companies measuring as much? According to Cappelli, "It's a different skill set for the HR department. There's a tendency for people to go into HR if they have an interest in psychology." In other words, he says, they are not data-oriented. However, successful CHROs have embraced metrics as part of their required skill set.

At Infosys, an IT consulting firm based in India, Senior Vice President of Human Resources Nandita Gurjar says she tracks gross margin of her company's people costs around the world. That means analyzing what percentage of locals they will hire in a particular geography and what the processes around hiring visa-dependent people are.

Another metric is the average retention age of their employees. "We watch to see if the retention age is dropping or increasing. We want to make sure people stay longer in the organization" because that leads to higher productivity, more value to their customers and, in the end, higher revenue.

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They create a five-year model of the employee-experience pipeline and that helps Gurjar gauge whether they have the right culture that will continue to attract the right people. Her "people dashboard report" shows the conversion rates for hiring in various areas such as North America and details what HR is doing right and not doing right, which is critical because not hiring enough people on time will hurt the trust its clients have in Infosys.

Although all the data is business-related, that doesn't mean softer areas such as culture and values are not addressed because, as she says, they are "not touchy feely topics" -- instead, they lead to real conversations about how the company may need to fix a culture in a particular area because the behavior is not aligned with its professional values and doesn't contribute positively to the bottom line.

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