Monday 28 March 2011

Bersin: Measuring HCM in financial terms?


   Have you seen Bersin’s latest High Impact HR report?  There are a number of interesting findings in this, but the one that sticks out for me is the suggestion that the the greatest common factor shared by today’s HR leaders is measuring HR programmes in financial terms (mentioned by 35% of respondents and followed closely by delivering workforce metrics and analytics, mentioned by 26% of the sample).

Really?  Not improving engagement, creating a more compelling culture, or raising capability?  Not improving collaboration or the quality of conversation?  Not aligning organisation structures or redesigning roles to provide greater autonomy and integration?  Just measuring?


Now I’m delivering a two-day programme on HR metrics today so this isn’t a topic I’m unfamiliar with or see as unimportant.  But really?


There are a couple of things going on here for me – linked, or rather not linked!, to my previous post on HR’s POV.  And I guess the question is whether Bersin has unearthed a common POV about HCM, or whether it just proved that HR hasn’t got one?  That group-think reigns supreme?  This would be my suggestion.


I just don’t think that much of what we do in HR, or at least the parts of HR which are the most important, can be measured in financial terms.  They simply don’t have any absolute financial value, and their links to end financial value are simply to indistinct to place a financial value upon them.

This isn’t about HR’s inability to measure, lack of effective technology or the capability of HR professionals.  It’s simply about financial measures not being the appropriate units to measure what we do in HR.

Now if you’ve got a good basis to disagree with me on this, that’s fine – that’s a POV.  But if you’ve just accepted the “can’t manage what you can’t measure” mantra without really thinking this through, and without reading the cases of organisations which have changed things without measuring them, then I don’t think that is a POV at all.  It’s just following a fashion.  And the fashion in HR certainly seems to be moving towards measuring in financial terms.  But this doesn’t mean that it’s right or appropriate to do this.

What do you think?



  • Consulting - Research - Speaking  - Training -  Writing
  • Strategy  -  Talent  -  Engagement  -  Change and OD
  • Contact  me to  create more  value for  your business
  • jon  [dot] ingham [at] strategic [dash] hcm [dot] com



  1. Jon,

    I think you're right - inputs in HR can be measured as costs but the outputs are rarely financial. Yes we can show associations with financial metrics but the outputs themselves are almost always intangibles. That, as you say, doesn't make them non-valuable nor unique to HR.

    The vast amount of my work is related to HR data, measurement and analysis. Yet if I was to define the current state of HR metrics it seems (to me) as a focus on numerical values rather that meaning. We should never forget that done well metrics should enable more accurate decision making, should prompt action to be taken and communicated in a way that there is a clear picture of what needs doing. You always need to start with the question 'what do I need to know to manage this business / function / process better?' We need to aim towards storytelling with data.

    If HR can work out how to accurately measure the marginal return on its' activities then great. You probably can get quite close if you run controlled experiments, and I'd certainly recommend more trials than HR currently does. But I don't see it as necessary (nor necessarily stable over time / business state). Management is generally happy with intangibles as long as they can agree that measuring them makes sense and that realistic targets can be set. Few measures in abstraction make sense.

  2. I think this is a perspective that is often not a comfortable issue for many people to bring to light.

    While there are definitely things we can define a direct financial metric and contribution to and items that we can show evidence where we contributed, there are also those activities that can't directly be measured in financial sense.

    I think that the Bersin study probably speaks more to peoples inability to show that "contribution" to the financial bottom line.

    Always interesting.

  3. Thanks both. Yes, I agree that there are things HR can do around it, but the key point for me is still for HR to understand that financial metrics aren't necessarily the answer (depending on the question).


Please add your comment here (email me your comments if you have trouble and I will put them up for you)