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The Evolution of Human Capital Metrics
Last week I was privileged enough to moderate a roundtable of HR professionals at the first Indeed.com international
conference. Our topic of conversation centred on big data, HR metrics and ROI. The participants represented a variety of
industries including insurance, banking, retail, IT and professional services.
The group talked about how talent strategy and recruitment has been shifting over the last
couple of years due to technology innovation, mobile, social media and Millennials entering the
workforce. With so much activity happening electronically the amount of data available to be
captured, deciphered and analyzed can be astounding, not to mention overwhelming. Some of the participants said they had
a hard time figuring out where to start. As the roundtable continued we also talked about the shift from relying on RMS data
to using data warehouses and/or HRMS’ which integrate data from a variety of different sources. The focus on using big data
to help articulate ROI in the form of human capital metrics was still an area all of our companies continue to work through. As
I reflect on our conversations I realized that human capital metrics also needs to evolve to include new skills such as
engagement and collaboration to reflect the modern workforce.
Let’s start with collaboration. Not a new skill, but usually used to assess project
management and IT related roles. Newer generations such as Millennials rely
on collaboration and crowd sourcing techniques to complete work and build
relationships. As reliance on virtual interaction and engagement play a greater
role in attraction and retention, collaboration is fast becoming an essential skill
for all jobs across organizations, especially leadership and management roles.
Let’s look at two human capital metrics that can evolve to give credit to this skill.
• Quality of hire- measures the calibre of external new talent determined by early performance indicators with the
organization. Collaboration is gaining more industry acceptance as criteria for performance. In a recent blog post the
CEB updated their definition of quality of hire to incorporate collaboration. The new definition now reads; a new
hire’s current and likely future effectiveness at completing his or her individual tasks, and contributing to others’
performance and using others’ contributions to improve his or her own performance1
. The updated definition pays
homage to collaboration as an important contributor to both individual and
• Ready Now Candidates- Measures the number of potential
successors that can be developed for managerial and leadership positions2
With an almost even distribution of Baby Boomers, Gen X’ers and
Millennials in the workforce, engagement and collaboration are two
important skills that people managers need to bring to the table in the
modern workplace. Organizations should build in a measure to gage how effective Managers are at collaborating
below, across and above their positions. This can be done as part of an employee, manager and peer review.
Managers with higher rating on collaboration can not only manoeuver within the organization, but may have a higher
effectiveness in leading and managing teams.
Engagement is a current measure in the human capital vernacular. Most organizations typically send out their engagement
survey once a year to gauge how connected employees are. The outcome should be to develop an action plan to address
areas where engagement is low. Through blogs, social networking channels and crowd sourcing websites (e.g. Indeed,
1 CEB Corporate Leadership Council, “The Metrics Standard” (2013)
LinkedIn groups, Glassdoor, etc.) digital dialogue, or what I call engagement; is also becoming a more relevant indicator of
employee retention, performance and the employee value proposition.
Consider that from a talent sourcing perspective, more candidates want to have a relationship with a potential employer
before they make a decision on whether that employer is a good fit for them. I equate it dating; you have to go on a few
dates before you know if you’re ready to make a commitment. Let’s take a look at how two human capital metrics can evolve
to include social engagement.
• Employee Engagement Index- Measures employees’ engagement in their work. Turnover may occur if employees feel
disconnected between the organization’s employment offer and their own needs. Employee’s on-going interactions
and communications will continue to shape their opinion of the organization influencing retention and commitment3
Organizations are challenged to find new and different ways to continuously engage with their employees to learn
about, assess and identify areas for improvement. Social platform and collaboration tools for feedback and ideas with
interaction can have a positive impact on the employee’s perception of the organization, impacting both
commitment and retention. Organizations that only rely on annual surveys
and/or do not engage in dialogue with employees risk employees using other
public avenues to share information and voice opinions about the company.
• Employee Net Promoter Score- Measures the difference between the
number of employees who are “promoters” (recommend organization as an
employer) and number of employees who are “detractors” (would not
recommend the organization as an employer)4
. Through crowdsourcing and social networking there is a broader
forum for both detractors and promoters to make their opinions viral. Through outlets like Indeed.com and Glassdoor
anonymous reviews can provide rich insight into an organizations work culture to potential job seeking candidates.
Organizations should be using technology to regularly engage employees earlier in the employee life cycle to pulse
check employees perceptions.
Talent sourcing has typically been the topic of focus on how social
media and technology are impacting recruitment approaches. It has
higher visibility because it’s a front line operational function that can
measure if approaches are yielding results. Talent management also
needs to embrace changes and recognize that newer generations bring
different skills to the table. Using static measures that don’t
incorporate or recognize these new skills can impact performance
management, succession planning and retention. Employees will
continue to assess the employment offer promise and evaluate how
closely it aligns with reality.
By taking collaboration and engagement into consideration, how would it impact the way you view your talent pool?
By Ann Barrett; Director eRecruitment & Social Media Strategy