HR provides valuable insight to management. This has emerged from face-to-face interviews with HR people in six different companies. Information relating to absence, wage development and staff turnover are among the most important key figures reported to management
The result of interviews with HR managers from six major Norwegian and Swedish companies shows that HR reports are valuable data to management. It provides an insight into how the company is doing and highlights opportunities for development in a wide range of important areas.
Together with the interviewees, we have looked at which key figures are most frequently reported to management by HR. The results are displayed in this overview:
Both financial key figures and insight into softer values
HR reports on both financial key figures and slightly softer values, for example, employee satisfaction. Our interviewees tell us that there is increasing focus on key figures. However, another focal point is that it must be possible to measure the softer values in figures.
"The things it is most important to report depend on the situation the company finds itself in. It could be staff turnover in one instance while in other situations the focus is on wage development. However, there are a couple of key figures which are always relevant: Absence and capacity utilisation”, explains an HR Business Partner from a major Norwegian industrial company.
”We report on absence, the number of employees and staff turnover. In addition, we conduct an annual employee survey, from which we report on employee morale, leadership, performance and commitment”, explains Solbjørg Myren, who is HR Manager with Firesafe.
Several of the people we spoke with believe that, by collecting data and following up on information regarding its workforce, it is possible to create the prerequisites for a good organisation which utilises its potential.
"I think it is interesting to see key figures and softer values in context. Therefore, I think that it is important to use tools that ensure that both of these areas can be measured. If employee morale is low in a department it often manifests itself in the form of absence due to illness, staff turnover and efficiency. Measurement of these factors is crucial to obtaining a picture of how the company is developing and which measures should be implemented”, says Solbjørg Myren.
”There is a clear link between how employees feel and our result”, says Ida Janghed, HR Director with Hilti Sweden. Ida Janghed emphasises that KPIs are an important tool for determining how the company is doing. Otherwise, as a manager, it is impossible to have an overview of what is happening. She adds that it is not until you look behind the figures that the opportunity to make real improvements in the company arises.
”I am a big proponent of figures – indeed, statistics talk their own clear language but the figures tell you very little if they are not analysed and followed up on. This is best done by involving the respective managers for every department and discussing why things are as they are and what you can do to change the situation”, believes Ida Janghed.
”At Borregaard we take a keen interest in manager capacity, recruitment power, competence and reputation, and we have KPIs for all these areas”, explains Kari Strande, HR Manager with Borregaard
Absence and staff turnover important for management
It is crucial for the company's management to have access to current key figures. The clearer the figures are and the clearer the cohesion between the figures and the company's bottom line is, the more attention they are often paid by management. Therefore, the reporting of key figures on absence and staff turnover are often some of the most important figures HR reports on.
Absence due to illness and staff turnover are critical factors for all companies. In the wholesale business, Solar, they look at the distribution between countries and divisions in order to determine whether there is an underlying problem.
"We work a great deal with leadership, and I believe that all managers greatly appreciate the support they can get from HR and the tools that are available. Consequently, HR has an important mandate when it comes to carrying out various activities and implementing initiatives," says HR Manager Lisa Pira.
At Solar, quarterly reports are prepared with information on, for example, absence due to illness, the number of employees and staff turnover. These figures are of great interest to the managers and the key figures provide valuable support when it comes to making strategic decisions. In the monthly reports, comparisons are made between countries so that you can see how the other countries' figures for absence due to illness and staff turnover compare in relation to your own.
At Franke Futurum, a great deal of focus is placed on absence due to illness, too. Since Ulrika Öberg took up her position as HR Manager around two years ago, she has focused intensely on drawing up strategies to reduce the number of employees on long-term sick leave. Therefore, HR reports on the number of hours worked, absence due to illness and so on.
”I have worked tirelessly to ensure that this is prioritised internally and collaborate with the working environment organisation on preventing absence through sickness. It's still too early to say how much absence due to illness has gone down as a result of this. We must continue the work and wait and see”, says Ulrika Öberg.
Data collection with Workforce Management and time and attendance systems
A variety of different methods, tools and data sources are used when HR reports to management on important key figures. Among the preferred tools are payroll, HR, ERP and T&A systems. The collection of data for reporting on productivity-related key figures is done via time registration systems and Workforce Management solutions.
”We use Workforce Management systems as measuring tools for collecting data which enable us to measure absence due to illness, overtime and utilisation levels. Data collection is, of course, a very important part of it all”, explains an HR Business Partner from a Norwegian industrial company.
Solar is committed to LEAN, and HR supports this philosophy by collecting and analysing productivity data by means of Workforce Management and ERP systems. Here, data relating to finance, central warehousing, customer service and sales is collected and analysed. The previous period of time is taken as the point of departure when it comes to estimating forthcoming orders and staffing levels are set on the basis of this. By looking at the statistics for absence, it is also possible to estimate how many extra staff will be required to cover any absentees.
”Since we are constantly working on improvements, we always follow up on figures for quality deviations, faults, missed delivery times etc. Thus, different functions within the company can learn from one another, whether it is in relation to staffing, productivity or efficiency. This has led to area and work managers getting a sizeable mandate to be able to implement changes where they are needed and to put forward proposals for which investments are required. When it is so clearly defined it is easier to make a decision”, concludes Lisa Pira.