The Chief Human Resources Officer (CHRO) versus Other C-Level Executives
The 2006 HRMetrics.org survey of C-level executives helps to illustrate the difference between the tools that HR needs to manage their teams versus what other C-level executives want to see from HR.
When asked which metrics are most important to each group in the survey (CHRO and other C-level executives), their top five metrics look like those show in Table 6.1.
| CHRO | Other C-Level | |
|---|---|---|
| 1 | HR Employee to Total Employee Ratio | New Hire Quality |
| 2 | Cost-per-Hire | Line Manager Satisfaction |
| 3 | Time-to-Fill | Recruiting Efficiency Ratio |
| 4 | Vacancy Rate | Time-to-Start |
| 5 | Turnover Ratio | Vacancy Rate |
The CHRO and other C-level managers share only one metric in their top five metrics. Does this mean that HR is just wrong and they are not aligned with the business? Of course not. What it does mean is that the CHRO is responsible for not only managing up to the executive team, but also down to their staff and out to their constituents. The CHRO top five list is far more spread out against the three audiences that they are responsible for managing. And that’s the key to solving a core problem in presenting to executive management: Many times the CHRO is presenting the wrong metrics to the executive audience.
Metrics to manage the executive team are notoriously difficult. Shifting priorities, business decisions, and the events of a quarter will impact what piques the interest of executives on any given day. However, when the entire list of metrics in order of importance is reviewed, the list evens out considerably—both executives and CHROs intuitively understand the metrics that are important for different audiences. The results from the survey are shown in Table 6.2 and demonstrate the combined understanding.
| Metrics Ratings | CHROs | Other C-Level |
|---|---|---|
| New Hire Quality | 7.7 | 9.6 |
| Line Manager Satisfaction | 7.4 | 9.3 |
| Recruiting Efficiency Ratio | 7.8 | 8.9 |
| Time-to-Start | 7.2 | 8.6 |
| Vacancy Rate | 8.5 | 8.4 |
| Turnover Ratio | 7.9 | 8.2 |
| Actual/Contracted Time to Start | 6.2 | 8.1 |
| HR Expense to Operating Expense | 5.6 | 7.4 |
| HR Expense per Employee | 5.8 | 7.3 |
| Revenue per Employee | 6.1 | 7.3 |
| Net Income per Employee | 6.2 | 6.8 |
| Cost-per-Hire | 8.6 | 6.7 |
| Quality of Candidate | 7.1 | 6.4 |
| Salaries as a percentage of operating income | 5.9 | 6.4 |
| HR Employee to Total Employee Ratio | 9.3 | 6.2 |
| Time-to-Fill | 8.6 | 6.2 |
| Health Care Expense per Covered Employee | 6.2 | 6.1 |
| Health Care Expense per Employee | 5.9 | 5.8 |
| Health Care Expense Increase | 5.9 | 5.5 |
| Annual Salary Increase | 5.8 | 5.0 |
There are literally hundreds of metrics documented as best practices by the Saratoga Institute, HR consulting organizations, the Society of Human Resources Management (SHRM), and HRMetrics.org. Here we provide a high-level overview of helpful metrics through each part of the lifecycle, using the most highly rated metrics from the survey with some other common metrics. We will categorize the metrics by their likely audience as well. The talent lifecycle categories we will use are as follows:
Attract → Acquire → Develop → Utilize → Separate