Staffing

The traditional method of measuring whether the HR departments were doing their job correctly was to look at how long it took to fill a vacant position, and how many positions were open at any given time. It was assumed that as long as open positions were filled within a reasonable amount of time, the staff of the Human Resources department was doing their job well. At some companies, there were even bonuses offered for HR departments which managed to consistently fill positions rapidly. Unfortunately for the companies that believed these bonuses were an incentive for a job well done, all of these practices led to HR departments hiring candidates to fill open positions that were essentially “seat fillers”. While these people may have been good candidates, they were not necessarily the best people for the positions they were filling, leaving them frustrated with their jobs and the hiring companies with ineffective employees filling out their ranks. Eventually, it became obvious that filling a position quickly was not a goal that truly reflected the tasks of the HR department.

A main focus of staffing metrics is taking information that has always been available for HR departments to analyze and quantifying it, turning it into hard numbers or dollars or percentages. The importance of having actual numbers available for HR departments to compare and contrast cannot be overstated. Qualitative data tends to be less concrete, less certain, and it is difficult to determine with simple qualitative data where the best course of action lies. When an HR manager can say definitively to the company’s upper management that it will cost twenty thousand dollars more to fill a vacant position with an unqualified hire than it would cost to simply leave the position vacant until a better candidate is found, it becomes very simple to determine which course of action should be followed. This is not to say that qualitative data is useless in a modern business setting, simply that it becomes far more useful when there are hard numbers available to back up the guesses and assumptions that qualitative data can tend to rely on. Changes in staffing metrics have made a big difference in the ability of HR departments to confidently analyze the performance of various departments in the company both over time and as compared to other departments within the same company.

With companies today growing exponentially and increasing the number of skilled positions that are vital to the company’s functioning, employees who are in a position simply to fill a vacant spot can cost companies millions of dollars and greatly affect their ability to do business in an expanding global market. It is important to understand that these employees are not necessarily under qualified or substandard employees, simply that they are people who have not been placed in a position that uses their strengths, to the detriment of both the filler employee and the hiring company. Staffing metrics allow HR departments to determine where it is disadvantageous for a company to employ a candidate who is not fully qualified for the position, and where it truly is vital to have the position filled regardless of the abilities of the person filling it.

Now that the old paradigm of staffing and Human Resources methodologies have been for the most part discredited, it is important for these departments to find new ways to determine whether they are successfully accomplishing their goals. The employee turnover rate is one way to determine whether the candidates who are being hired are truly the best for the job. After all, even if the Human Resources department is hiring only people who are exceptionally well qualified for the job opening, they do the company no good if they leave six months after they are hired. Training new hires can cost an exorbitant amount of money for a company, and generally there is a specific break-even time (which is different depending upon the company and the particular position being filled) until the employee has contributed enough for the company to have recouped its output.

Quantitative staffing metrics can allow the HR department to determine which departments seem to have a particular problem with high employee turnover, and what if any similarities tend to show up amongst those employees who leave the company early. These data alone can go a long way toward helping HR departments identify and solve the problem. For example, if there is a particular department that seems to have a problem with its employees quickly leaving the company, then it is likely that there is something about that section of the company.

The problem may be an overbearing manager, a hostile work environment, or an inaccurate job description which leaves candidates unprepared for the work that will be expected of them, but whatever it is, knowing about it will make it easier to fix the problem. Generally once that problem is fixed, the HR department can do a better job of keeping that department well-staffed, thus reducing employee turnover and saving the company money. Similarly, if the HR department discovers that there are similarities among the people who are being hired and only stay with the company for a short period of time, then steps can be taken to weed out those candidates who seem more likely to leave the company within a year.

Staffing metrics, which may at first glance seem like nothing but additional paperwork wasting the time of already overworked Human Resources staffers, actually provide many benefits to both the company and to the HR department itself. Human Resources departments which have the ability to quantify and measure the impacts of vacant positions, unplanned absences, and unused annual leave are actually in a far better position to understand what to do about those issues than are departments where they simply guess, or make assumptions about the impacts of these occurrences on the company’s bottom line.

Additionally, when HR departments can demonstrate to upper management within a company exactly where and how they are making a difference and improving the company’s overall fiscal performance, then their jobs are far more secure. More and more in previous decades, companies were beginning to wonder whether HR departments were truly necessary, and cuts tended to impact this department before others. With the creation of staffing metrics, Human Resources departments are able to demonstrate in a very concrete way what they contribute to the company, and so upper management has realized precisely how valuable this department is.

Before HR metrics revolutionized the way that Human Resources managers did their jobs, staffing practices within the company were often based upon common assumptions about what constituted a good job candidate, and whether or not a vacant position should be filled immediately. It was assumed that all vacant positions should be filled as quickly as possible, and indeed the performance indicators most often looked at to determine how good of a job the Human Resources department was doing revolved around how rapidly the department could fill a vacant position.

Now that it is possible for HR departments to quantitatively measure the cost of filling a position versus the cost to the company of leaving it empty until the perfect candidate comes along, Human Resources has actually become far more vital to the company’s economic well being. Whereas it was previously thought that all positions should be filled as soon as they possibly could be, with the advent of staffing metrics it has become clear that this is not always the case. For one thing, there is the issue of turnover and costs associated with training: when the company has to spend a good deal of money to train a new hire and that person leaves very quickly, the company is out far more money than they would have been if the position had simply been left vacant.

Also, if someone is hired simply as a “seat filler” and then the perfect candidate for the job is found a few weeks later, the company is in an awkward position. They cannot simply fire the less qualified employee, and so they must find another vacant position to transition that person into, so that the more qualified candidate can fill the original position. All of this transition and upheaval affects the efficiency of the department in which it is taken place, and the company once again loses more money than they would have had the position remained empty in the first place.

While staffing metrics have made a huge and generally very positive impact on the way that Human Resources departments do their jobs and the overall benefits of the department within a company, it is important that HR managers and the company’s upper management not go overboard with reports and quantification. Too much data can be as harmful as too little data, especially if frivolous reports are being created in order to satisfy a need for quantification and more time is being spent on data generation and analysis than on actually solving the problems that are being identified.

The focus for managers both within the HR department and throughout the company should always be on key performance indicators. Key performance indicators, or KPIs, are those goals that have been determined to be the most beneficial to the company’s overall mission. For the HR department, employee turnover is frequently a vital KPI, and therefore keeping the employee turnover rate low is a primary task of the HR department. Depending on what it is that a company does, and thus what it requires its employees to do, standard KPIs for the HR department may involve creation of jobs which reinforce the company’s goals, hiring and retention of employees who have characteristics the company desperately needs, or hiring and retention of employees with advanced degrees.

Beyond simple hiring and payroll tasks, staffing metrics may be able to help Human Resources departments determine how their employee policies can be improved. For example, if many long-term employees seem to be leaving the company, a HR staff member might be able to generate data on why people are leaving, and measure these results quantitatively. The goal of most companies would be to retain long-term employees until they reach retirement, so if the reports show that long-term employees are instead citing better job offers, poor benefits packages, poor compensation levels, or hostile work environments as a reason for leaving, then the HR staff has discovered an obvious issue within the company. The HR department then needs to work with management in order to determine the best way to resolve the problem, whether it is through increasing compensation or benefits, reorganizing a department, or removing an employee who is causing trouble for coworkers and subordinates.

Another valuable aspect of staffing metrics is the ability to use quantitative data to compare where a company ranks against its competitors. It is difficult to determine when a competitor is doing better in any particular area using only observation and qualitative data, but when the data is rendered quantitatively, as numbers, it becomes far simpler to compare. When Human Resources departments can ascertain where the leading companies in the field are excelling, they can then turn their attention to those staffing areas within their own company. The advent of staffing metrics as a tool for refining how a particular company does business has vastly improved the overall effectiveness of Human Resources departments, and made it clear to everyone what valuable parts of the company they are.