3 tips to build an HR reporting framework and 5 metrics to track

In this article we’re going to look at how to set up an effective reporting framework to educate your People Operations strategy by leveraging data.

Putting together an HR reporting framework to educate your people strategy can be a daunting task. But it’s fundamental to ensure your business is heading in the right direction. Here is a thread on how to get it right. 👇#HR #startup #hiring #analytics

— Humaans (@HumaansHQ) August 13, 2019

Amongst this decade's trends in HR we can list AI/ML, D&I (diversity and inclusion), flexible working, gamification, and HR analytics. You name it, we have it.

The focus on technology and innovation, even in HR, has never been so high, and just like people, functions worry of becoming irrelevant too. To not be left behind, HR practices need to evolve. Leveraging the power of data can help.

Data – why or why not

Data has become an integral part of our day to day, informing the way we make decisions and explain these to others. And why should it not be? Data is grounded in facts and is supposed to be comprehensible and less subject to interpretations than assumptions and ideas.

Still, data can be manipulated and, if taken out of context, misinterpreted.

To define and educate your people strategy, simplicity is key. It doesn't matter what's your growth stage or your level of maturity. The focus on a few comprehensive data points is often preferable to rich and granular data visualisation; that can make our keynotes look impressive but also hard to decipher. Let's leave Looker with Google and Tableau with Salesforce – for now 😜

How to build a good HR reporting framework

1. Start with the problem, not with the metrics

It’s important to tailor the questions to the problem you are trying to solve, or your report will end up being “Rich in Data and Poor in Insight” – as Des Traynor from Intercom pointed out.

When setting the basics for our reporting framework we should aim for:

• Relevance – what are the business questions that you set out to address?
• Clarity – can this be widely shared and consumed by our busy C-Suite without many back and forths?
• Frequency – how often do we need to check and review these data points?

2. Be data informed, not data driven

Focus on the quality of the data and not on the volume.

Analytics help address multiple business questions, monitor evolution and predict trends, which ultimately will impact the shape of the company and overall success. But rather than blindly piling up reports, integrate them into your processes and use them to inform decisions, not drive them.

3. Identify the data points that make sense for your business

The landscape is vast when looking at metrics available, and when working on your people reporting framework it can be daunting to decide what to start monitoring. Just start with the basics (more to follow), and keep on improving as you progress.

When it comes to reporting, the two extremes are generally "rigid" (for VC backed companies) and "relaxed" (for low headcount highly profitable businesses). Pretty much anything can be found in-between. Good rule of thumb is to keep an eye on a few core metrics to ensure the business is healthy and get more sophisticated only if needed.

5 metrics you should care about ‌‌

As mentioned, the key metrics for a good HR reporting will vary depending on the company’s size and requirements, but what's below should most likely benefit a good range of startups.

These can be reported quarterly or monthly, based on the size of your company. You may also adjust the frequency by looking at your setup and policies in place (eg. when do you perform salary reviews and bonuses are paid out).

📈 Head-counts changes – personally I benefit from keeping an eye on:

• Tenure: how long on average an employee remains in the company
• Retention: how many employees remain over a given period of time
• Turnover: rate at which employees are leaving

These help you understand if your retention strategies are working. Further segmenting your research based on location, department or even demographics could give you further insights into where to address your efforts.

🤒 Absence and absenteeism – starting with paid time off, sick leave and working from home days, gives a good indication of whether there are patterns of absence you need to address.
These can vary depending on department, location, contract type, etc, but the goal here is to ensure employees get enough time to rest (fundamental for productivity and overall happiness) as well as spot anomalies and action as needed.

🤑 Salaries – filter the total cost by location, department, job level. You'll want to keep track of these to monitor costs, measure impact, and calibrate appropriately to support retention. You also want to make sure there are no excessive gaps in compensation when looking at the same cohort.

🌈 Diversity & Inclusion – diversity in your employee base delivers better business results, and that's a fact. Gender, ethnicity, age, education, disabilities, there are many dimensions that can help us have a well rounded and balanced workforce. As long as you have a fair hiring approach, you shouldn’t track everything.
D&I monitoring is also important because as you reach a certain size pay gap reporting it becomes mandatory (e.g. 250+ in the UK, 100+ in the US, etc), and generally help inform your programs, goals and recruitment strategy.

🤞 Recruiting and hiring – these are the areas which should be most informed by data. The higher volumes of collected information and the high cost associated with these activities is the perfect harvesting ground. The must haves here are:

1. Time to hire → how much time is spent between the first contact with the candidate and the moment the offer is accepted?
2. Time to fill → how long does it take to fill a role from the moment you posted the job to hiring the right talent? This is key for strategic planning, specifically around growth or to mitigate risk around replacing critical roles.
3. Cost per hire → how much does it cost the company to hire a new employee? These figures should factor in recruiter's fees, advertising, salaries and training required. For a company, clarity around this data point is core because this is one of the areas where the implications (time and cost) are not necessarily visible, and a broken process can cost top dollars.

Collating data and preparing reports is time consuming, but insightful if done well. And, unless you have a whole team of analysts at your disposal, we do not advise attempting to track everything!

Conclusion 🙌

‌Although it might seem like quite a bit already, we have not even scraped the surface, having left out items like engagement, performance, benefits usage, and more.

Every business is unique and what you report on must vary based on practicality and actionability.

Important thing is to get started and then evolve together with the company and the business’s requirements. One size does not fit all, and that is part of the fun.

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Which other metrics are you tracking, would you like to track or think shouldn’t be tracked? Hope you found this useful, and if you have follow up questions you can reach me on Twitter at @Lauren31v.

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