Is HR Afraid to Step on The Scale?

“You get what you inspect, not what you expect”

– Business Proverb

 

We’re almost a quarter of the way into the year 2012 but it seems like only yesterday we were counting down the seconds until the New Year and lining up our goals for 2012 and beyond. Individually we made goals to lose weight or join more clubs and corporately we made goals to retain more professionals, get more bang for our buck in our corporate overhead and more.

If you’re like most people, you wrote your goals down or at least kept a mental note of them…

…but just how good can our goals be if we’re not measuring them? Is HR afraid of the scale?

Metrics, metrics, metrics. One of my favorite roles in HR Consulting is establishing and tracking HR Metrics.  Measurements used to determine the value and effectiveness of HR strategies. Typically includes such items as cost per hire, turnover rates/costs, training and human capital ROI, labor /productivity rates and costs, benefit costs per employee, etc.

Metrics are the foundation for growth. If you don’t know where you are, how will you know what it takes to get where you are going? If you are driving from your town to the next major city, that experience is full of metrics. You’re measuring the time and distance that it takes with your GPS. You’re looking at your gas tank to see if you have enough gas. And you’re even probably going to take a bathroom break to make sure you don’t have to “go” before you get to your destination! Why is Business any different? We make goals but do not take inventory of statistical data that helps give us a clear picture of where we stand and what it takes to get where we want to be.

Fighting monsters in the dark. What happens when you drive for growth but do not take into account the metrics surrounding the move? It’s like boxing in the dark. Sure you may be able to identify some key general areas that will always improve as a result of changes but you can hardly know how effective your decisions are and that can be a time and financial drain. The best planning involves calculated investments of time and resources  into the areas that matter most. Metrics help in this a great deal.

 

What are some common HR Metric formulas?:

Metric Formula
Absence rate # days absent in month ÷ (average # of employees during a month x  # of workdays)
Benefit or program costs per employee total cost of employee benefit/program ÷ total # of employees
Benefits as a percent of salary annual benefits cost ÷ annual salary
Compensation as a percent of total compensation annual salary ÷ total compensation (salary + benefits + additional compensation)
Compensation or benefit revenue ratio compensation or benefit cost ÷ revenue
Cost per hire recruitment costs ÷ (compensation cost + benefits cost)
Engagement or satisfaction rating percent of employees engaged or satisfied overall or with a given aspect of the workplace
Percent of performance goals met or exceeded # of performance goals met or exceeded ÷ total # of performance goals
Percent receiving performance rating # of employees rated under a given score or rating on their performance evaluation ÷ total # of employees
Revenue per employee revenue ÷ total # of employees
Return on investment (ROI) (total benefit – total costs) x 100
Time to fill (average) total days taken to fill a job ÷ number hired
Training/development hours sum of total training hours ÷ total # of employees
Tenure average # of years of service at the organization across all employees
Turnover (annual) # of employees exiting the job during 12 month period ÷ average actual # of employees during the same period
Turnover costs total costs of separation + vacancy + replacement + training
Utilization percent total number of employees utilizing a program/service/benefit  ÷ total number of employees eligible to utilize a program/service/benefit
Workers’ compensation cost per employee total workers compensation cost for year ÷ average number of employees
Workers’ compensation incident rate (number of injuries and/or illnesses per 100 full-time employees ∕ total hours worked by all employees during the calendar year) x 200,000
Yield ratio percentage of applicants from a recruitment source that make it to the next stage of the selection process

 

Leadership Takeaway: Metrics are not to be used as a tool for micro-management but they are a tool to be used for effective leadership and guidance. Jumpstart:HR offers a unique year-long HR Outsourcing/Advising service to it’s costumers that allows us to chart metrics and for your organization and recommend  growth strategies that are both measurable and cost-effective.

Human Resources Takeaway: HR is constantly asking to prove itself by the value added contributions that it brings to an organization. If you’re having trouble communicating your value to Senior Officials then it may be time to consider Jumpstart:HR as a trusted Strategic Partner. Work with us to define your specific HR goals and manage them in a long-term plan.

Professional Development: Dead-end jobs are found in organizations that don’t track metrics that a relevant to your career growth and development. When interviewing for a position, ask what kind of tools the organization uses to track staffing and career development. If your organization doesn’t do such things then it may be time to hire your own personal HR Department. Jumpstart:HR offers personal career development coaching sessions to help you get the most out of your career.

Your guide to workers’ compensation insurance

A newly published guide for Business Owners and HR Professionals has been published on InsuranceQuotes.com. It features Seven important tips that must be considered to help employers save money and decrease the stress surrounding this process. The guide features the following quote and supporting information from Jumpstart:HR CEO Joey V. Price:

 

7. Make note of pre-existing conditions.

Workers sometimes get hurt on the job by tweaking a pre-existing injury, says Joey Price, CEO of Jumpstart HR, a human resources consulting firm in Washington, D.C. A construction worker who injured a knee while playing sports several years ago, for instance, may be more likely to suffer knee problems while working at the project site.

For pre-existing conditions, you may be able to prove that your work site did not contribute to the injury, Price says. Doing so can free you from any liability charges that may arise from an incident. Screen employees during the hiring process, and document any pre-existing conditions. If an injury does occur, you’ll have notes ready to help assess the situation.

To read the guide in full, visit this link.

To learn more about how Jumpstart:HR can help you navigate the challenges of WC Insurance, send a message here to schedule your free 30 minute consultation.

The origins of employee retirement benefits pension plans

Guest Contributor:  Yolanda Santirosa

The earliest pension plan, established in 1875 was the American Express plan. Benefits under this plan were 50% of the average pay earned in the final 10 years of a participants employment and could not exceed $500 dollars annually. The second plan was established five years later by the Baltimore and Ohio Railroad in 1880. During the next 50 years roughly 400 retirement plans were established. The railroad, banking and public utility industries instituted the early employee retirement plans. During this same time frame the manufacturing industry was still relatively new and therefore they were slow to develop employee retirement plans since they were not faced with employee retirement problems. The first group annuity contract, which is a contract designed to meet retirement goals between an individual and an insurance company, was issued in 1921 by the Metropolitan Insurance Company. Also, in 1924 the Equitable Life Assurance Society of the United States became the second company to offer group annuities.

Even though pension plans came about in the 1800’s there was no significant growth in pension plans until the creation of the Wage Stabilization Act of 1942. During World War II as part of a general price control effort, the Wage Stabilization Program denied employers competing for labor the ability to offer higher wages as an incentive to attract and retain employees. Additionally, union leaders found that the wage control hindered their efforts to persuade employees to join unions and created difficulties for the union leaders to validate the advantage of belonging to a union to their membership. Under the Wage Stabilization Act the War Labor Board permitted the establishment of fringe benefits programs that included pensions thus beginning the practice of employer-sponsored health and pension plans. Finally, in 1948 the National Labor Relations Board (NLRB) ruled that employers had a legal obligation to bargain over the terms of pension plans.

Reference
Allen, E. T., Melone, J. J, Rosenbloom, J.S, & Mahoney, D. F. (2008). Retirement plans 401(k)s, IRAs, and other deferred compensation approaches. (10th.). New York, NY: McGraw-Hill/Irwin.

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