Photo by Frank Busch on Unsplash


In the hunt for business profits – whenever a human resources department isn’t a profit center – it’s likely the right strategies and metrics aren’t being implemented.

So if your HR department isn’t providing you with the right information, you’re not terminally unique. It’s a universal issue.

HR departments could do better work, according to multiple studies

  1. The Hay Group, a global management firm, reported HR pros fall short as “strategic business partners.”
  2. HR firm Kenexa concluded a big gap exists between what human resources professionals think they know about their workforce and what employees actually believe. Issues include employee engagement, loyalty and retention.
  3. A global strategic-consulting firm, The Hackett Group, said HR departments aren’t providing their companies enough support for employees, talent recruitment, learning and development, and succession planning.

Along with the nation’s historically low unemployment rate and competition to fill jobs, all of this helps to result in a talent crisis and alarming conclusions to say the least.

However, HR professionals are never 100 percent at fault. Nearly every company complains about recruiting and the lack of skills among workers.

Senior bosses can share in the blame, too.

Many bosses need to do a better job of sharing their visions to increase profits as well as their expectations for HR professionals.

Either way – to silence critics and to garner praise for helping their companies to profits –it’s in the best interest of HR professionals to use the right strategies and metrics.

Where to start

Start with a question: What do HR pros need to do in order to alleviate your concerns as a chief executive and to win your praise?

Answer: They need to understand your big-picture perspective, and be ready with information and solutions.

HR can achieve this by starting to implement the right approaches in strategies and metrics.


Three salient strategies to remember:

  1. Ask the right questions of department heads, for example:

– “What helps you to operate efficiently?”

– “What helps you to satisfy our customers?”

– “What data does the boss want most often?”

(Among your departments, you’ll see common threads in the most critical data.)

  1. Develop the most-relevant informationThat means analyzing the numbers to discover their meaning. What are the causes of positive and adverse developments? Find out.

As CEO, you should be getting multiple recommendations.

(Note to HR professionals, communicate data better by using best practices in the art of persuasion — marketing ideas to the CEO boss.)

  1. Continually review and study relevant data.


Important metrics include hiring and staffing, compensation, and the overall effectiveness of your organization.

Hiring and Staffing:

Cost per hire – the total recruiting costs (e.g., advertising, search firm fees, HR staff time, hiring manager time, and background checks) divided by the number of new hires.

Turnover – divide your number of departed employees by the average number of full-time employees (FTE):

Percentage in turnover – from the number of departing employees, subtract the number of unwanted employees (e.g., terminated employees) and divide by the average number of FTE.

Duration in hiring process – determine the median number of days that start with a job vacancy until the replacement employee starts work.


Compensation to revenue ratio – divide your compensation cost by the revenue.

Compensation expense to revenue ratio – divide your compensation cost by the operating expense.

Effectiveness of your organization:

Revenue factor – divide your business revenue by the total number of FTE.

Human capital value-added – from your revenue subtract the operating expenses (your compensation and benefit costs) and divide by the number of FTE.

Nail these strategies and metrics, and your company will increase profits.

From the Coach’s Corner, related content:

Secrets in Motivating Employees to Offer Profitable Ideas — Savvy employers know how to profit from their human capital. Such knowledge is a powerful weapon for high performance in a competitive marketplace.

Power Your Brand with Employee Empowerment — Are you investing in marketing, but not getting the anticipated return on your investment? If you’re disappointed by your ROI, remember marketing may or may not be the problem.

Remove Guesswork for Promoting Talent — Baseball is a great metaphor for winning in business by promoting the right employees   To win baseball championships, there’s often a correlation — among  a baseball team’s management, talent and farm system. A farm system’s role is to provide training and experience for young players. 

4 Mindsets for Leadership in Performance Reviews — Are you nervous at the thought of giving employee-performance reviews? You’re not alone. Your employees aren’t exactly thrilled, either. Typically, employees aren’t convinced they can get valid feedback. If they’ve experienced poor managers, they likely dread the performance-review process or are skeptical of the outcome.

Trust Gap between Managers and Workers — How to Drive Engagement — While it’s true there are companies that are aware that good morale among employees propels profits, many businesses are missing opportunities for growth. It’s not because of marketing. It has to do with internal issues.

“There is always a better way.

-Thomas Edison


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.