We recently discussed HR’s failure to keep pace with a changing workplace and market for talent. If you missed that first piece, I recommend you start there.
Although it sounds like a dire situation, there is a way forward.
Companies need talent, and HR has the ability to meet this need if they adapt.
It is unacceptable for HR to lack well-thought-out answers to questions about how companies will find, reward, and retain talent. Hours burned on manual administration of payroll, PTO, and other employee record keeping are a common source of HR’s failure to provide those answers.
Even for non-administrative tasks, like compensation design, performance management, and recognition, it’s hard to iterate, improve, or learn anything from these programs if all of your time is spent keeping spreadsheets in order.
Software is eating the world — including HR
So, what does the “way forward” look like? There’s been an explosion of investment and development in a marketplace of modern technologies that belong in every HR pro’s toolkit.
These technologies are set up to work together and with the communication and project management tools your company already uses on a day-to-day basis.
With these technologies, HR can shift its focus from the manual and repetitive processes of administering programs to focus on what is working, what isn’t working, and what needs to happen in order for your company to find and retain the necessary talent to succeed.
If management wants HR to contribute, they need to invest.
It's well worth the initial investment of time and money to thoughtfully consider the types of tools that will be impactful within your organization. Once these technologies are in place, HR jobs can begin adding value.
It can be dizzying to analyze all the available tools at once—there are often overlapping features, integrations, and full suites of products that claim to offer a one-size-fits-all “Swiss Army Knife” approach. You’re better off thoughtfully choosing those which will best work in your organization.
Introducing the “People Operations Stack”
What is a stack? It’s a complementary set of tools and technologies that offer a superior solution for a given functional area.
This concept originated with software developers, but in recent years it has spread to the marketing and sales side of business operations. It’s well past time for HR to introduce this concept into their world.
There should be at least four layers focused on the following tasks:
- Recruit: Get them in the door!
- Maintain: Prioritize painless recordkeeping
- Engage: Recognize, reward, and retain
- Perform: Measure, learn, and grow
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Do it, measure it, and make it better
Any major investment should be held accountable with metrics—what gets measured, gets improved. HR should not be exempt from this. You can’t know if you’re getting better if you don’t know how you’re doing now.
To measure the effectiveness of your stack, we propose tying a metric that balances quality and effectiveness to each of the layers that we proposed above.
Recruit
Metric: Hiring Effectiveness Ratio
Measurement: average tenure of new hire (days) / average time to hire (days)
Goal: increase over time
Maintain
Metric: People Operations Leverage
Measurement: # of HR employees / total # of employees
Goal: maintain as company grows
Engage
Metric: E-churn (read a great post about this one by Tomer Tagrin here)
Measurement: # of employees who quit / total # of employees
Goal: minimize
Perform
Metric: Opportunity Ratio
Measurement: # of job openings filled internally / # of job openings
Goal: maximize
These metrics are just a start—there are numerous others that can be used to measure how effective HR is at finding, retaining, and growing talent at scale. It’s a waste of time and resources to adopt the best tools in the marketplace without measuring how much impact they’re having.
As you measure your effectiveness, you can iterate on both which tools you use, as well as how you use them day-to-day.
