Winning and Losing the HR Game

My recent column, “Employees Should Be Managed as Valued Assets,” prompted a reader to suggest government should adopt the business practice and require agencies to disclose information related to their human capital management practices. She suggested creating Human Resources scoreboards where agency workforce metrics would be available to leaders and the public, like the statistics for sports teams—win-loss records, batting averages, earned run averages, etc.  

She was referring to what is today the most important trend in HR management—the use of metrics and analytics to increase HR’s contribution to an employer’s success. Amazon lists 140 books on the subject, almost all published in the past five years. Workforce headcount data have been reported for decades (e.g. diversity metrics) but it provides little insight into problems. Today, the focus is on combining metrics with analytics to improve decision making. The right metrics provide a snapshot of performance and help leaders decide where improvement is necessary.

Metrics can help leaders understand how performance is changing over time and when compared with data from other organizations, where performance is deficient. Using the same metrics across federal agencies would highlight the best and worst performers. The value of metrics is realized, however, only when changes are initiated that improve performance on the metrics.

Gallup has built a business on that model, using its Q12 survey to help employers improve on a series of HR metrics (turnover, grievances, accidents, etc). The company’s research confirms the linkage between employee engagement scores and performance on HR metrics. Companies rely routinely on that linkage in planning strategies to improve worker productivity and reduce costs.

Government and HR Metrics

To learn how HR metrics are used in government, I went to the Office of Personnel Management website and searched the word “metrics.” It produced a long list of reports (e.g., Shared Service Center HR Benchmarking Report) and memos on subjects like “Time-to-Hire Reporting Requirements.” But missing from the list was evidence that HR metrics are used routinely across government.

Metrics of course have been prominent in government management for more than two decades, so I assumed HR metrics had to be reported someplace. That prompted a second search, this time on the Office of Management and Budget website. That search produced a list of press releases primarily on the economy but nothing on government’s HR metrics. Next, I asked contacts to point me to sources of reported HR metrics (several of these individuals frequently post columns on Government Executive) but no one was able to help.

Workforce management is one of the few areas of government operations suited to comparisons across agencies as well as with at some larger corporations. And as Gallup and all the “best places to work” studies here and in other countries have shown, winning on “people management” leads to winning teams.  There is a clear parallel with the use of analytics in the baseball movie “Moneyball.”

The use of metrics is not a game but comparative data are well suited to competition among similar organizations. No one wants to get the lowest grades. The use of comparative data over time, with the goal of improving performance, is an obvious early step in developing an improvement strategy. It contributes to a shared focus and agreement on the need for change.

OPM should adopt the Gallup approach, if they have not already done so, to determine if the Federal Employee Viewpoint Survey response data are statistically linked to HR metrics. The survey includes questions relevant to a broad range of HR related practices. The FEVS data are not well suited to this use, however, since the year-to-year response rate has been dropping.  

To highlight the significance of the response rate, only 41 percent of federal employees responded to FEVS in 2018. In contrast, 85 percent is the typical response rate to the Gallup survey.

HR’s Role Needs to be Redefined

This is not about identifying HR metrics or promoting the function’s value; research and the lessons learned from leading employers have made that clear. This is about developing a strategy for HR offices and government leaders to look to the experience with HR metrics to improve agency performance.  

To date, HR offices in government have played an obviously limited role, described recently as “mired in paperwork.” The critics far out number the supporters. If the critics prevail, the focus could be limited to efficiency and cost cutting metrics, but cost cutting will eventually chip away at morale and performance.  It’s time to follow the trend in business and expand the role of HR offices.

Investing in the changes to improve HR metrics can save time and reduce costs, but far more important it will contribute to building a more capable and productive workforce. Comparisons across agencies or across similar units (e.g., federal prisons) or occupations would be invaluable to agency leaders.

HR’s value is realized, as an example, when job vacancies are filled quickly from a pool of well qualified candidates. Reducing the direct and indirect costs of the employment process adds to HR’s value. A balanced picture of HR’s effectiveness in hiring is summarized by the metrics “time to fill,” “costs to hire,” “offer acceptance rate” and “hiring manager satisfaction.”

Where morale is low, HR should be expected to play a role in improving the work experience. New hires should have a positive work experience and be excited about their career prospects. HR needs to take the lead in improving the “fit” of new hires to the job and in creating an effective onboarding experience. It also needs to provide adequate training to develop effective managers. That makes HR’s role in reducing “turnover in the first year” an important metric.

The point is that HR policies and practices are central to creating and managing a fully productive workforce. HR specialists impact employees and their work experience, directly and indirectly, from their first contact with an organization until they retire. HR metrics, from general workforce measures like absence rates to specific measures like market pay comparisons, are available to drive improved results.

Comparisons with data from “best places to work” companies would be especially enlightening. Those are the places where people love their jobs. The HR practices in those organizations are available to government and realistically any added cost would be nominal when compared with the performance gains.  Government should be an employer of choice.

This is a problem the Chief Human Capital Officers Council should address. They can decide what HR metrics are most relevant and commit to developing the database.  

In “Study: Federal Workforce Is on the Verge of Catastrophe,” Government Executive explored a new report released by the Senior Executives Association, which makes it clear that government must make workforce management a higher priority. That was followed this week by a supporting column, “Restoring Health to a Civil Service on Life Support.” That will require political leadership supported by strong Human Resource offices. HR metrics are the key.