“I am convinced that nothing we do is more important than hiring and developing people. At the end of the day, you bet on people, not on strategies.” – Lawrence Bossidy, former CEO of AlliedSignal and Honeywell Corporation.
You’d be hard-pressed to find an HR leader who disagrees with Bossidy. Human development is intrinsic to corporate success, which is why more CHROs find themselves with a seat at the table with the board of directors.
More companies recognise that strategy and people aren’t mutually exclusive. They count on HR leaders to help guide the boardroom as they orchestrate five- and 10-year plans that rely on a highly functioning workforce. HR data has become increasingly valuable in powering these projects.
What HR data does the board of directors want to see?
The introduction of HR software on a mass scale has led to an even larger trove of data, but not all of it is important in the boardroom. By understanding exactly what the board of directors expect concerning contribution, HR teams can be better prepared to support the company’s initiatives.
A study on CHROs in UK boardrooms found that they tended to have stronger backing from other members in regards to business planning and that the CEO was more conscious about their involvement. This lines up well with the findings from the 2017 Great Place to Work HR Trends Survey:
• HR’s influence within leadership expanded for 82 percent of respondents.
• HR’s credibility improved for 76 percent.
• HR’s analytics gained more support with three-quarters of respondents.
“When HR can deliver metrics that directly influence the trajectory of the business, they gain steadfast support from the board and members in executive leadership,” Sharon Looney, CHRO at CoreHR, says.
“The significance of metrics that contribute to business continuity, especially those concerning attrition or succession planning, can’t be overlooked.”
Here are four data points that every CHRO should have in any board meeting.
1. People-related costs
A well-functioning board of directors understands how important people are to the longevity of the business – especially in labour-intensive industries or sectors that rely on niche skillsets.
With employee engagement now owning real estate in every leader’s mind, many companies are looking ahead as to how they can manage the costs of building a brand that’s respected by candidates and employees.
CHROs have the critically important objective of making sure that the cost of personal and professional development doesn’t outweigh its benefits. Make sure to have real-time data on the following:
• Professional development.
• Employee training.
• Bonuses and benefits.
That information can directly contribute to more budget being poured into HR’s planned projects, or potentially shifting it away to other areas of the business that need it if everything is going well.
2. Attrition trends
Turnover rates affect the company in a number of ways:
- Experienced team members take their knowledge elsewhere – potentially to competitors.
- The cost of replacing each person is roughly six to nine months of their salary, according to the Society for Human Resource Management.
- Attrition correlates with negative morale across the business.
Being able to attribute retention issues to specific causes is vital in driving growth in all areas of the business. These obstacles could be in personal and professional development, succession planning or with managers – but it’s near impossible to identify them without data to support the working theory.
“Retention is a competitive difference maker in many niche industries and even larger ones,” Sharon says. “An analysis of the trends can support sweeping initiatives that keep that talent in-house.”
By leveraging real-time data, HR leaders can also create live dashboards that provide in-depth analysis of each person in the organisation. The metrics allow them to identify employees who are at high risk of leaving, allowing them to intervene quickly and potentially boost retention rates.
3. Succession pipeline
Business continuity depends on a steady stream of capable leaders at every point in the organisation. It’s a topic that’s incredibly important to the board of directors – especially regarding executive leadership – and it’s HR’s job to deliver on it.
CHROs should always have real-time data on the best performers in the business that keys the board in to:
• Their skills and qualifications.
• The role they play in their department.
• Their past reviews.
• Their career trajectory.
At a high level, this will provide a dashboard that shows precisely which portion of the workforce is lagging behind, which are average performers and who the top stars are. This information will contribute to workforce management discussions and will play a critical role in making significant decisions.
4. Employee performance
The company will always have its overarching goals which are discussed by the board of directors, but that growth is driven from the bottom-up by high performing teams.
CHROs should be able to attribute goals to individual team members, their departments and the business as a whole, while also having the ability to track their performance. Continuing to do so year-over-year can provide the boardroom with a clear sense of direction on how their actions directly translate to workforce performance.
“Maintaining an updated record of employee accomplishments or shortcomings can help the board of directors understand if their goals are too lofty or under target,” Sharon says.
There are many ways this can be achieved, though the board will want to hear about the goals that impact organisational finances and operations the most. Use an analytics platform to help assign a qualitative value to productivity. Other metrics worth watching include sales or revenue figures as well as leads and project activity.
People are the creators of all value in your business if you measure and track these data points efficiently, and you’ll see a real change in your organisation, from the top down.