Strategic Business Intelligence for HR:

6 HR Metrics No Executive Should Be Without

By analyzing and reporting on the full range of human capital 
management (HCM) data, business intelligence (BI) uncovers the insights 
executives need for smarter staffing, planning, and budgeting decisions. 
 With the right metrics, HR can not only deliver additional value, savings, 
and increased productivity to the business, but also can more clearly 
 
articulate to the CEO and executive team the vital role HR plays in 
business success. 

I n an economic climate characterized by cost-cutting and

increased regulatory requirements, HR faces growing demands
to communicate the value it creates in ways that CEOs can better
appreciate. That means moving away from soft measurements such
as “improvements” and adopting quantifiable metrics similar to
those executives use to monitor the overall business. Meaningful HR
metrics can include things such as recruitment costs, employee
retention rates, and employee satisfaction metrics.

BI enables HR to proactively improve performance, analyze critical

HR data, and explore different workforce metrics. Here are some of
the most valuable strategic metrics that BI tools can deliver to HR:

Turnover Analysis: Keeping Your Best and Brightest

Employee turnover costs can range from six to 36 months of
salary and benefits. To increase retention rates, companies must
proactively identify factors leading to turnover. BI can consolidate
and monitor factors such as location, department, seniority, gender,
supervisor, salary, promotions, and skills and analyze their impact
on turnover. These analytics help companies create a profile of
BI enables HR to  at-risk employees and prevent attrition.
proactively improve 
performance, analyze  Level-Setting Compensation
critical HR data, and  Top organizations know performance-based compensation is
highly effective in attracting and retaining outstanding employees.
explore different  BI helps HR design benefits and policies by correlating
workforce metrics.  compensation with performance targets, skills, seniority, and other
factors. For example, an HR executive can analyze compensation
across a variety of dimensions (e.g., department, location, gender, or
seniority) to determine if it is competitive. The result: lower turnover
and recruitment costs.

Reducing Unnecessary Overtime Expenses

In many industries, overtime can be a major component of operating
expenses. But BI can significantly reduce OT by identifying
potentially inefficient or duplicate scheduling as well as seasonal
spikes. BI tools for human capital management enable HR to
analyze and minimize overtime hours and costs by department,
organization, job, location, supervisor, month, or other factors and
determine where scheduling adjustments and staffing/shift changes
could decrease overtime costs.

Cost-Effective Benefits Analysis

Employer-paid or subsidized benefits are a major cost center for

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 most companies. To ensure an organization offers the most cost-
effective plans, it must have a complete picture of the true and full
costs to the business as well as employee participation levels by
location, benefit plan, organization level, and other criteria. The
right BI tools, integrated with an HRMS/payroll solution, can make
providing these metrics a breeze.

Recruiting Top Talent

Whether it’s newspaper ads, agencies, job fairs, or employee
referrals, companies invest heavily to attract top talent. How can an
HR professional assess if that spending is attracting the right
people? Many HR departments calculate their average cost-per-hire.
However, this tells only part of the story.

With BI, HR professionals can measure recruitment efforts based

on the time required to recruit. From there, they could easily
calculate the time, money, and recruitment method to recruit a
specific employee, and correlate these metrics to the employee’s
performance. The HR department might find one method attracts
more job candidates in a shorter time or at a lower cost, but that the
people are not as highly qualified as those identified by another
recruiting channel that costs more or takes more time. In this way,
the manager can see which methods deliver the highest-quality
candidates.
HR professionals 
need BI tools that are  Optimizing Training and Development Investments
delivered fully  The investment companies make in employee development can be
among their highest line items—$56.8 billion for U.S. companies
integrated with a  last year. Companies need to know if those investments are
unified HRMS,  producing tangible returns, such as increased sales or greater
payroll, benefits, and  productivity. What’s more, HR departments must identify current
talent management  skills and anticipate future gaps, and allocate training resources to
ensure optimal productivity.
solution—so that 
the BI tools can  With the right BI tools, HR managers can measure improvements
analyze and report  in employee performance and the effectiveness of training programs
on all areas that  as it correlates to training costs.
impact HR.
Conclusion
The right BI tools can empower HR executives with visibility into
how they can contribute to improving the company’s bottom line.
With the right metrics, HR can not only deliver additional value,
savings, and increased productivity to the business, but also can
more clearly articulate to the CEO and executive team the vital role
HR plays in business success.

But what’s the key to finding the right BI tools? HR professionals

need BI tools that are delivered fully integrated with a unified
HRMS, payroll, benefits, and talent management solution—so that
the BI tools can analyze and report on all areas that impact HR—
not just benefits or recruiting alone, for example. To find BI tools
that can analyze any component of human capital management
most efficiently, look for an end-to-end HCM solution that includes
built-in BI tools out-of-the-box.

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 For more information, please visit www.ultimatesoftware.com.

Ultimate Software is a leading provider of comprehensive HR, payroll, and

talent management solutions. Ultimate’s award-winning UltiPro® includes
recruitment, onboarding, benefits, payroll, performance and learning
management, business intelligence and robust reporting, compensation
planning, plus time and attendance—all through Web-hosted SaaS with self-
service for administrators, executives, managers, and employees.
Ultimate has more than 1,900 customers representing diverse industries,
including such organizations as The Container Store, Elizabeth Arden, Major
League Baseball, The New York Yankees Baseball Team, Nintendo of
America, Ruth’s Chris Steak House, and Sony Music Entertainment.

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January 2010

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