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Regular metrics use linked to HR involvement in strategic direction
September 13, 2004
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Washington, D.C. -- Human resource (HR) executives whose departments measure HR activities are more likely to report being involved in organization-wide strategic planning, according to a survey released by the Society for Human Resource Management, and BNA, Inc.

Overall, the HR Department Benchmarks and Analysis 2004 survey of nearly 950 human resource executives finds that 61 percent say they have "full" or "substantial" strategic involvement in their organizations. Yet, initiatives used to support strategic thinking, such as HR information systems (13

percent) and measurement and metrics (9 percent), remain low priorities for resource allocation in 2004. Higher priorities for 2004 generally include employee benefits (34 percent), recruitment (27 percent) and training and development (26 percent).

Despite its lower priority, the survey finds that HR measurement and metrics tend to go hand in hand with involvement in organizational strategy. For example, among HR departments that measure core activities most regularly, 83 percent of HR executives report "substantial" or "full" strategic involvement. The figure drops to 46 percent for HR executives in departments that measure least regularly.

"HR is being asked to measure and explain how it affects the success of the organization -- a request that is made of all critical areas of an organization," says SHRM President and CEO Susan R. Meisinger, SPHR.  "HR professionals must be able to quantify their contributions if they are going to assist in setting the strategic direction of the business."

At the same time, many HR departments face steadily increasing workloads. The survey results indicate that HR departments are far more likely to have added responsibilities within the last year (38 percent) than to have reduced them (8 percent).  The net change in HR responsibilities is also the highest seen in 10 years.  Moreover, the survey finds that HR departments appear to be doing more without the benefit of staff increases.

"The silver lining for busy HR departments is that more is not always better when it comes to measurement," says BNA Director of Research Joshua Joseph. "What really matters is for HR to base its metrics on key criteria that drive an organization's success."

Other survey findings provide additional perspective on trends in HR measurement and metrics. One encouraging finding is that measurement is a growing priority among HR departments.  For example, although only 9 percent of surveyed executives identified measurement as a top priority in 2004, this figure is up from 5 percent in 2003.

The survey also identifies areas that HR departments are most and least likely to measure.  For example, HR departments regularly use measurement tools to assess compensation and benefits (67 percent), employee relations (60 percent), staffing (45 percent), and training and development (44 percent) -- all core functions of human resource departments.  By contrast, measurements are conducted less regularly in the areas of succession planning (22 percent) and organizational effectiveness (22 percent).

In addition, the survey shows that HR's use of measurement tools tends to increase with the size of an organization.  For example, "trend analysis and reporting to senior management," is performed regularly by HR in 16 percent of organizations with fewer than 250 employees.  In organizations with 2,500 employees or more, 51 percent of HR departments regularly perform this function.

HR Department Benchmarks and Analysis 2004 is a comprehensive, national survey of human resource departments that was conducted between April 12, 2004, and May 7, 2004.  The survey report presents findings on outsourcing, strategy and measurement, staffing, and expenditures and budgets.  Respondents were 943 human resource executives representing a broad cross section of U.S.

employers. This year's survey was conducted with oversight from a volunteer panel of experts consisting of HR vice presidents at major companies, leading academic researchers, and established consultants.

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