Four Groups Blog

Andrew Weissman picked up on the popular theme of measuring and placing a value on HR. Andrew wrote

In exploring the concept of how to measure the return an enterprise receives from its investment in people (the largest single investment made by every organization), I wondered how many companies actually measure this, and if they did what metrics they used.

Here in the UK, at the moment it is an uphill battle to ensure that companies report on their HR metrics. We made mention of this in April when we wrote Taskforce members ignore own advice on people data – Part 2.

While there is no doubting the links between people and performance, the ability to measure this is of course a step in the right direction (see DoubleStar for example). However, as Andrew Marritt writes, it’s no easy feat!

My take on one of the reasons that HR has a low credibility in most organisations is that it tries to ‘copy’ other parts of the organisation only to make a mess of it. Most senior management with any comprehension of numbers will soon see the weakness of either ROI of recruitment or Quality of Hire. Go in with a dollar value of the economic contribution that an individual makes and most will probably smile sweetly and then smirk behind your back. Either that, or want to understand how you modeled accurately a whole organisation. Remember if you had an accurate model they could then manage it perfectly.

I couldn’t agree more with Andrew and believe that the challenge basically boils down to one of value. Not in a purely statistical or empirical sense, but in winning influence and buy-in from other parts of the firm. This is the real challenge and is still up for grabs in my mind.