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People are an organizations' biggest asset and easily amount to 30% of company costs so even small improvements can have a bottom-line impact. A unique toolkit to an important new trend, People Data demystifies and simplifies the process of understanding and working with human capital metrics.



Chapter 1. Why Bother about Human Capital Metrics?

If we in business aspire to make better people decisions and take more targeted people actions, we must bother about human capital metrics. Whatever business you lead and manage, people objectives are essential. Whatever industry you compete in, the roles, responsibilities, skills, and expertise of managers and workers should be part of the business plan. Your business plan helps to secure funding for your enterprise; it gives the business a sense of purpose and direction, and, finally, people objectives and financial forecasts provide the business with targets to aim for and enable the business to monitor its progress. Using and applying people data swiftly and cleverly are about improving business performance.

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Chapter 2. Working Strategically with Human Capital

A good way to compete is to aim to be unique. Competition is not about being the best with a few winners and many losers. It is about being unique in the eyes of the customers you serve. A BMW is a good car and so is a Volkswagen. They can both be described as the “best” car, however, the question is which car is unique to you as a customer.1 Human capital metrics can help identify that uniqueness inside your company and support execution of your business strategy. Human capital measurement has the potential to become talent management. In this chapter, several case examples help to illustrate how human capital metrics should be driven by the business strategy and how proprietary metrics for your specific strategic choice can be created. Working strategically with human capital also involves considerations about uniqueness, quality, access, privacy, and governance of people data. Usage and application of human capital metrics are dependent on the organization maturity of your company and will evolve with past experience and over time. You may want to look at the maturity matrix that I will introduce later in this chapter as an opportunity to progress from one level to the next at your chosen speed.

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Chapter 3. The Machine Room

In this chapter, we will be approaching the machine room, or the inner workings, of human capital metrics. The machine room is hot and noisy, not calm and quiet, as you would expect. There may be health and safety issues, if you get bored, lose your way or fall into one of the machines. Be prepared to get your hands dirty and stay focused as we look at the principles behind human capital metrics, different types of metric, sample calculations, meaning of results, benchmarking and target setting, how to interpret and contextualize results, the interplay of quantitative and qualitative data, and different organizational approaches to collecting and sharing human capital metrics.

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Chapter 4. Determining What Measures You Need

There are a number of ways to go about identifying and prioritizing human capital metrics for your company. In Chapter 3, we looked at ten examples of different metric types:1.Turnover rate2.New hire % of high performers3.Career Path Ratio4.Operating profit per employee5.Termination reason breakdown6.Tenure distribution7.Employee engagement index8.Top talent recommendation9.Free-text comments in survey10.Employee photos of company values

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Chapter 5. A Toolbox for Managers

At the risk of oversimplifying things, I will endeavor to come up with a proposal for a human capital metrics toolbox for managers in this chapter. A toolbox is handy because it encourages you to take action and helps you get started, hopefully avoiding you doing nothing. You think about the job at hand and which tool(s) to bring along to fix it. Without a toolbox, you work with no tools or apply random tools.

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Chapter 6. Making It Happen

Once you have your measurement approach, your toolbox implemented and begun working with your metrics, the next challenge is applying the metrics and turning your data into action. In fact, the most damaging (and costly) thing you can at this point is nothing. There will be an expectation in the organization that data and feedback are going to be used to drive positive change. There will be an appetite for change and improvement. If you implement the necessary change, your organization will reap the benefits of this investment. Like any other measurement data, people data needs to be brought to life and form the basis for action. This key message was emphasized already in the first chapter of the book, where the process from data to action is also outlined. In its simplest form, the “data to action” process consists of three steps:1.Understand and make sense of the people data by yourself as an organization leader and together with your leadership team2.Share reports and overviews with your team/the individual and through discussion and further analysis reach a common understanding on what the data tell us

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Chapter 7. Limitations and Obstacles

The whole book has been about how to think, analyze and act systematically around human capital metrics so that you will be better prepared to work with people data and make data-driven people decisions. Along the way, I have explored the difficulties, conflicts, and constraints involved in this process. In this chapter, I will summarize the most common limitations and obstacles to be encountered and suggest how you might overcome them.

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Chapter 8. Metrics for Skeptics

During my career, I have come across many colleagues who have not only been skeptical about human capital metrics, but also bored with them. Admittedly, it is not the world’s most exciting topic and without real care and attention it can be rather dull! I have even experienced one colleague with an analytical background from academia turning into a skeptic when joining a business organization in a HR manager role on the grounds that metrics apply to research, not in the real business world!

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Chapter 9. Calls to Action

I would like to end this book as I began it, however, at this point without the “if.” We now assume that in business we do aspire to make more evidence driven people decisions and take more targeted people actions and, therefore, we must bother about human capital metrics. We can remove the “if.”

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