As we move into the fourth quarter one idea for the Human Resources department is to provide an annual Key Indicators Report to the leadership team. This report would summarize the Human Resource activities over the past year along with establishing goals and objectives for the organization for the next 12 months. In essence, this is a performance review on the function. What would the sections of the Key Indicators Report include?
Each year HR departments examine the benefit plans to ensure that they are at market and are meeting the needs of the employees and their eligible dependents. This section of the report would include the costs associated the each benefit and the changes that were implemented. Typically the benefits offered by the company are often one of the key drivers of retention. With a detailed analysis of the plans offered, along with the expenses associated with each plan, management can be in a better position to determine if the benefits are in alignment with the company’s long term strategy. Additional examples would include the dollars associated with the 401(k) employer match and soft benefits such as a gym membership or an EAP.
Pay and rewards are key elements for also retaining staff. Each year HR department evaluate the salary ranges, job descriptions, pay and incentive plans. As part of a Key Indicators Report this section would evaluate the merit increase program to determine if those employees that receive the highest performance ratings are also receiving the largest percent increases. A simple matrix evaluating pay and performance can be created to summarize the performance process correlating that with pay. Additional examples to include in this section with be a summary of any changes to the incentive plans, any modifications to the performance review document or process as well as examining the merit increase program to project future labor expense.
Turnover is very expensive for companies today; particularly in a tight job market. As part of the Key Indicators Report this section would evaluate the number of employment requisitions filled over the past 12 months and the source for finding talent, any associated expenses filling positions as part of a search process and the use of temporary services. This evaluation will also assist management in finding how many days it takes to replace a position and identify if there are any trends in with respect to turnover.
Employee development is critical in today’s job market and this section of the report should include the training programs offered by the company, the number of employees that participated in company-sponsored training programs and the outcomes as a result of allowing employees to participate in professional development. Employees who enjoy their job and are satisfied with their career are more engaged and aligned with the business. Engaged employees who believe that the company is willing to invest in their development will also remain at the organization longer which can result in less turnover. Elements of this section of the report would include an analysis of the programs offered, the costs associated with the training and the needs analysis that was conducted in order to determine what programs would be of benefit to the staff.
Finally, the report should be presented to the leadership team in person to stress the importance of the Human Resources function over the past fiscal year as well as looking to the future. This opportunity to review past accomplishments can also lead into a discussion of the future budget, programs and additional headcount to support the needs of the organization.