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.

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