Finance Leaders 👀 The People Metrics That REALLY Matter

How much of your operational spending goes to people costs? Today’s business spends an average of 52% of their budget on their workforce. Some go as high as 70%.

But it’s worth it, right? People are a crucial component of your organization and having the right talent is the only way to true financial success. 

There’s no question about it—companies need to influence productivity and employees are demanding a better experience. But how can you be sure your investments are providing the right ROI? 

RJ Milnor, Founder & CEO of People Analytics Partners, distilled years of experience building world-class workforce strategies into # key people metrics you need to look at to cut costs where they’re not effective and invest in all the right places. 

Where not to focus: Lagging indicators

Traditional people metrics are important—but they are lagging indicators. Tracking these metrics is helpful to ensure your initiatives are working. But, they won’t reveal what your organization and people need until it’s too late. 

Keep tracking:

• Turnover & associated costs

• Profit-per-employee

• Demographics

• Basic human capital dashboard metrics

But don’t rely on these metrics to drive overall strategy optimization.

Instead, keep your eyes on these metrics: 

How people feel about their working environment significantly impacts their performance. When people are comfortable, feel genuinely cared for, and are given the right opportunities for connection and focus work, productivity can skyrocket (even with fewer work hours).

Want to influence productivity on the front end? Track these metrics, too:

• Psychological safety

• Trust

• Employee innovation and performance

• Sense of belonging

Build productivity with mixed methods:

Now we’ve established what’s important, you’re probably asking yourself: Great, now how do I track it? 

The answer: Take a mixed methods approach. A few truths for you:

1. Employee sentiment is usually pretty accurate—surveys, focus groups and interviews will reveal how your workforce feels about productivity.

2. Data can reveal the how and why—leverage insights to track patterns and productivity triggers. Do your hour-long meetings really increase collaboration?

3. Networking is crucial—who team members turn to for ideation and feedback are your champions. Do you know who they are?

When you understand the data and sentiment driving your culture, you can make intentional financial decisions regarding your people and collaboration efforts

The best part? It’s trackable. Meaning, you can use these insights for productivity assessment and workforce planning and forecasting.

We’re continuing to see a shift to remote and hybrid work, with as much as 22% of the workforce predicted to be fully remote by 2025. Now is the time to dig in and truly understand your culture and predictors, or risk losing control. 

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