Human resources (HR) is undeniably in a state of change. A convergence of global volatility, skills shortages, and higher C-suite expectations have left many HR teams asking the same question: How do we pivot from a reactive business to a ready one?
Forward-thinking HR departments are paving the way by focusing on six core priorities:
1. Flow
Embedding HR in the organization’s strategy means that the “value” HR operationally provides flows across the entire enterprise, shaping decisions not just in HR but also in finance, operations, and leadership. Rather than being siloed, HR must be at the center of business decision-making.
2. Digital
Legacy processes and disconnected systems hamper the employee experience and slow time-to-hire. Model HR departments adopt a beyond-implementation mentality, focusing on integrated, seamless solutions that help employees collaborate, learn, and work more efficiently.
3. Analytics
Data can answer the real questions the business is asking, around engagement, retention, skill needs, and strategic objectives. Leading HR organizations do more than just tracking dashboards; they blend HR data with finance or operations metrics to unlock deeper insights.
4. Talent
Managing and developing skills is foundational in an ultra-competitive labor market. Forward-thinking HR teams experiment with talent marketplaces, skill matching, and real-time development. Shift from a job-based approach to a skills-based approach, ensuring the right people can plug into the right opportunities quickly.
5. Purpose
Today’s employees want more than just a paycheck; they want to align with a company’s mission and values. It's ideal to utilize HR to integrate environmental, social, and governance (ESG) initiatives, achieve net zero goals, and embed broader organizational purposes into daily operations, enhancing engagement and brand reputation.
6. Wellbeing
People operating in high-stress, rapidly changing environments can’t sustain performance without a holistic approach to mental, physical, and emotional health. Future-fit HR invests in innovative well-being programs, from flexible schedules to mental health support, to help employees and the business thrive.
Why HR Data Is The Key To Strategic Decisions
Data is the engine driving clarity in the constantly changing working world. Historically, HR was left out of strategic decisions due to a lack of credible analytics. Now with the rise of more advanced HR technologies, it’s becoming imperative to include their insights.
Analytics are a competitive advantage
- Better business outcomes: HR Data isn’t just for tracking turnover or cost-per-hire; it can reveal deep organizational insights into productivity, training return on investment (ROI), or workforce planning.
- Leadership buy-in: Presenting HR data in terms of direct financial or operational metrics helps HR secure executive support.
Turning data into action
- Focus on integration: Merging HR data (e.g., turnover, performance) with operational data (e.g., revenue or project outcomes) yields strong evidence for planning.
- Predictive insights: Data can forecast churn, spot high-potential candidates, and identify risk areas, truly future-proofing the workforce strategy.
Single source of truth
- Data quality and alignment: Many organizations still face management misunderstandings about data’s value. Overcoming these hurdles, by ensuring data is accurate, governed, and well-presented, reinforces HR’s credibility.
- Cultural shift: Building a data-driven mindset in HR fosters consistent, evidence-based decisions, from hiring to performance management.
Nineteen HR Metrics To Supercharge Your Function
Bridging the strategic approach and data-driven mindset requires practical metrics. Below is a quick snapshot of some key HR metrics to track:
1. Time to hire: Measures recruiting efficiency. High values may indicate a cumbersome process or poor candidate experience.
2. Cost per hire: Helps track ROI in recruiting methods and indicates how well the recruitment budget is managed.
3. Quality of hire: Evaluates new hire performance, cultural fit, and retention, reflecting the effectiveness of your talent strategy.
4. Early turnover (first-year turnover): Pinpoints where mismatches occur before employees fully ramp up.
5. Turnover rate: Differentiating between high-performer and low-performer turnover can guide targeted retention strategies.
6. Performance & potential: Tools like the “9-box grid” help you map future leaders and identify skill gaps.
7. Revenue per employee: Illustrates overall workforce productivity and the financial impact of your talent.
8. Billable hours per employee: Key for professional service firms, ties directly to revenue and capacity planning.
9. HR to employee ratio: Shows how effectively HR resources are allocated.
10. Effectiveness of HR software: Adoption, active users, and retention reflect how well systems are integrated.
11. Absenteeism: High rates may signal stress, dissatisfaction, or health issues. Early detection can prevent bigger problems.
12. Training expenses per employee: Measures the investment in continuous learning, which can correlate with retention and agility.
13. Overtime expenses: Potential sign of resource constraints, sometimes linked to burnout or suboptimal scheduling.
14. Engagement rating (e.g., employee Net Promoter Score (eNPS)): Tracks employee sentiment, a direct driver of performance and advocacy.
15. Employee satisfaction: Captures workforce contentment, often measured via surveys covering workload, environment, and career growth.
16. Leadership effectiveness: 360-degree reviews or performance data to ensure leadership drives team success.
17. Time since last promotion: Long intervals might hint at career stagnation or flight risks among high potentials.
18. Soft HR metrics: Qualitative measures (e.g., manager communication effectiveness) can complement numeric data.
19. Single source of truth: Ensuring all HR data is integrated is itself a “meta-metric” that can drastically increase analytics power.
Putting It All Together: Next Steps For HR In 2025
Embed HR in the flow of work
- Act as a strategic partner, linking your function’s analytics with overall business goals.
- Co-create solutions with finance, operations, and the C-suite.
Double down on analytics
- Identify the top ten metrics that matter most to your organization, then measure, compare, and present them consistently.
- Don’t forget a “single source of truth”: integrated, high-quality data across the enterprise.
Prioritize talent & well-being
- Offer upskilling and career development programs that fulfill both company and employee goals.
- Design well-being initiatives that address mental, physical, and emotional health, preventing burnout and improving retention.
Cultivate purpose & digital strategy
- Align your HR roadmap with your organization’s purpose, including ESG and sustainability goals.
- Evaluate and upgrade digital tools for a better employee experience and more effective processes.
Monitor & refine with key metrics
- If you see high early turnover, reevaluate your onboarding or selection process.
- If revenue per employee is dipping, cross-check engagement and skill data to realign your workforce strategy.
Strengthening Your HR Systems
The era in which HR becomes a connected, analytics-led, future-focused function is accelerating. By blending insights from HR data and implementing a robust set of metrics, you can shape an HR function that actively drives business strategy.
Remember, each organization’s journey is unique, but the overarching message is clear. Invest in digital tools, glean real insights from analytics, build HR’s strategic credibility, and keep the workforce’s well-being at the heart of everything you do. That is the surest path to success in 2025 and beyond.
At Group Management Services (GMS), we provide small to midsize businesses (SMBs) with tailored HR services that allow the company to focus on what really matters, growing their business.
Ready to accelerate your HR transformation? Contact us to explore how GMS can provide you with HR services that truly move the needle.