hr metrics for nonprofits and ngos
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Lisa Brown MortonPresident & CEO
HR Metrics for Nonprofits and NGOs
Learning Objectives
Why HR Matters
It’s a Matter of Money
Defining HR’s Value: Metrics & Results
What is Working in Your Organization/ Q&A
HR Matters
If HR is going to survive in any organization, it must create
substantial value with similarly concrete results.
Why Does HR Matter? We manage the flow of people and the ways people
enter, move through and leave our organizations We help monitor performance management,
standards and rewards that reflect stakeholders' interests
We help manage the flow of information within our organizations so people know what is happening
We help to define the flow of work, including processes and accountability
Most importantly… We help to ensure our organizations deliver on their
missions to the communities they serve
HR Brings Value Attraction and retention of top talent from diverse
backgrounds Compensation practices that are fair and reasonable
given your organization’s available resources Minimization of increased costs associated with
employee benefits Elimination of unnecessary legal exposure associated
with dismissals, restructuring and redundancies Healthy workplace culture where performance
management concerns are addressed in a timely, constructive, proactive manner
Fostering of individual professional development that facilitates engagement, career development and optimum productivity
It’s a Matter of Money “HR is a
source of competitive advantage!”
Why It’s a Matter of Money
Key Question:Does the culture and work
environment of your organization, and the management of its staff,
inspire key stakeholders to support your mission, vision,
products and services?
HR’s Strategic Value
Can you make the connection between HR, mission delivery and
the level of profitability or financial sustainability that your
organization realizes?
Tips for Building HR’s Strategic Value
Focus on AND communicate how you can deliver diverse talent needed to fulfill organizational mission, vision and goals
Know and understand your organization’s sources of revenue and the flow and impact of those sources on operations/programs
Take courses on accounting fundamentals and financial planning/forecasting
Establish a strong partnership with your CFO and CDO
Tips for Building HR’s Strategic Value Cont’d
Intentionally contribute to critical thinking about organization practices
Tie expected HR outcomes to your organization’s overall strategic plan
Translate HR concerns/challenges into dollars; communicate the costs of doing nothing
The HR-Funding Connection
HR Impact & Results
Funding
OrganizationalPerformance &
CommunityImpact
Employee Commitment &Engagement
Defining HR Value: Metrics & Results
“What Gets Measured,
Gets Managed”
Why HR Metrics Matter
“HR metrics are about more than data and quantitative
measurement; they are about information – information that
leads to the investment in people and people-focused initiatives.”
Questions to Ask When Defining HR Value & Choosing Metrics
What are the capabilities that my organization must have to create services/programs that result in our supporters' taking money out of their wallets for us?
Are there skills and abilities of our staff that will enable us to understand and respond better to short-term and long-term demands of the communities that we serve?
Is our investment in HR practices delivering impactful results for staff, leadership and the community?
Does our HR strategy set an agenda for how we will help our organization succeed?
Defining HR’s Value in Metrics
DO use HR metrics for:
Development of strategy Benchmarking Compliance Assessment of
organizational/department goals/effectiveness
Defining HR’s Value in Metrics
Do NOT use HR metrics:
To report on information that is relevant to only to HR
That do not contribute to overall decision making or organizational strategy
That focus solely on the expense components of HR
Outcome, Purpose & Results of HR Metrics
Improvement in organizational development, effectiveness & competitiveness
Increased productivity Increased employee
satisfaction/engagement Improved return on investment (ROI)
Two Types of Metrics
Human capital metrics
Measure the optimization of the human capital of the organization
Human resource productivity metrics
Measure the ability/efficiency/effectiveness of the HR function to do its tasks (generally administrative)
Source: Deloitte
Common HR MetricsEfficiency Measures Cost per hireTime to fill vacanciesBenefit Costs Per EmployeeAbsenteeismTenureEffectiveness MeasuresEngagement/Satisfaction RatingsTurnoverImpact MeasuresYield Ratios (recruitment sources)
“Higher-performing companies are more apt to measure talent-related metrics
than lower performers.”
Source: The Productivity Blog
Metrics in High-Performing Organizations
Using Metrics to Communicate HR’s Value
Understand the key factors driving our organizations and then identify how HR impacts/contributes to those business goals
Remember that quantitative information (metrics) is a common language that all leaders understand and consider credible. Measure what leadership cares about, not what HR cares about
Create appropriate, relevant metrics that measure results of how HR contributes to our organizations’ business strategy or strategic plan
Less is more; more metrics ≠ more value Communicate results and impact to all key stakeholders
(Management, Board, Staff, Donors, Funders) on a quarterly, semi-annual or annual basis. Create an annual HR Report mirroring your organization’s Annual Report
HR Metrics – Avoiding the Pitfalls
Get input from your operations/programs leadership on how they think HR contributes to their success
Speak with finance about measures to use and which metrics would be best
Start small Identify one to two metrics that will
communicate HR’s impact If you don’t have the resources to collect data
for the entire organization, focus on a smaller department/program/grant. The results will energize you to do more next time
Keep asking yourself how you can translate HR metrics as contributions to business strategy
About UsNonprofit HR is a full-service consulting firm specializing exclusively in meeting the human resources needs of nonprofit organizations. We partner with the country’s leading nonprofit organizations in areas such as talent acquisition, executive search and consulting, all with the objective of making the nonprofit workforce the best it can be.
www.nonprofithr.com | info@nonprofithr.com
(202) 785-2060
Copyright © 2014 Nonprofit HR Solutions, LLC. All rights reserved.
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