Share the wealth: Leveraging shared metrics across payroll, human resources and finance to make better data-driven decisions

Here are some shared metrics between payroll, human resources and finance and how they can be practically applied:

Metric: Employee absenteeism and turnover rates

What is it?

Data about employee attendance including sick days and leaves of absence, as well as length of time with the organization.

Why is it important?

This data offers key insights into:

· Organizational costs: Absenteeism and turnover directly impact organizational costs in recruitment, overtime (as a result of employee absences) and performance. These metrics, when analyzed consistently, can uncover trends in a workforce that impact an organization’s financial bottom line.

· Employee engagement approaches: Absenteeism and turnover metrics paint a clear picture of how engaged employees are with an organization. Low or high measures can be linked to employee performance, financial indicators (e.g., increased or decreased revenue), as well as culture and reputation. If these metrics are trending in the wrong direction, greater insight from employees can be collected collaboratively between departments by integrating pointed questions through performance reviews, employee engagement surveys or exit interviews.

· Employee retention strategies: Understanding turnover rates can inform retention plans. This includes looking at high turnover within certain departments or positions to explore strategies for improvement, such as conducting a compensation review, enhancing development and growth opportunities for high performers and revisiting recruitment approaches.

Metric: Employee compensation

What is it?

Data about all areas of compensation, including pay, market competitiveness, benefits and other incentives (e.g., perks).

Why is it important?

This data offers key insights into:

· Pay equity: Compensation metrics can show whether employees are compensated fairly across the organization (i.e., equal work for equal pay). Disparities in pay may be inadvertent, as some organizations may not have an updated compensation system, or some departments may be unaware of what others are paying for comparable positions.

· Market competitiveness: By linking workforce productivity data with payroll and human resource metrics, an organization can gauge the competitiveness of its compensation packages. Finance may notice declining revenue per employee and, in collaboration with human resources and payroll, discover that employee productivity is linked to burnout or outdated compensation practices. As a result, adjustments can be made to workloads or compensation structures to improve both morale and financial performance.

· Benefits access: Understanding how benefits are accessed can inform future planning about an organization’s program. If certain benefits are consistently unused, this may allow for a re-allocation to other areas where employees are consistently maxing out or even exploration of a more flexible benefits package. Training and development could also be explored, as some benefits may be underutilized due to a lack of awareness.

Metric: Process compliance

What is it?

Data about compliance with operational practices, processes and policies across payroll, human resources and finance

Why is it important?

This data offers key insights into:

· Employee compliance: Sharing metrics across departments allows for a better understanding of quality control, as well as trends in overall compliance that may require certain priority areas to be revisited or retooled to reduce risk to the organization.

· Training and development programs: Employee onboarding and training programs may be adjusted to focus on enhancing staff knowledge about certain processes or changing how this training is delivered. If there is a trend in higher compliance levels when employees receive live training, an organization may prioritize using this approach rather than relying on mass communications or self-directed learning strategies.

· Audit priorities: Organizations that are concerned about compliance in certain priority areas may consider shared audits between departments. This will allow for any changes in practice to be reviewed to determine whether they had a positive impact and will result in a more consistent and transparent approach to information sharing, with a focus on continuous improvement.

Collaboration made simple: Approaches to encourage data sharing

It’s important that organizations wanting to improve the use of shared metrics embed practices that make it easier for employees representing payroll, human resources and finance to collaborate on a regular basis. Some options to consider include:

· Training and development on data collection and analysis: Training employees on how to consistently collect and analyze data is critical. Ideally, this training would occur collaboratively between departments, including standardized processes for how the information is shared to ensure that expectations are clear.

· Establish regular meeting mechanisms and performance indicators: Unless time is formally carved out for collaboration between departments, it can easily get pushed aside for other priorities. This includes shared support from leadership for ongoing collaboration, but also a commitment to measuring success and performance, both within and across departments, to hold each other accountable.

· Explore (or leverage) integrated systems: Using systems such as enterprise resource planning (ERP) or HR management software can create ongoing access to data between departments and the ability to track and report on metrics as frequently as needed.

HCM professionals are both fortunate and challenged by the sheer amount of data they collect. By identifying shared metrics across departments and committing to joint analysis, organizations can address negative trends and learn from positive ones. Even starting small with a few metrics and scaling over time can keep this work on everyone’s radar and avoid the information becoming a missed opportunity for everyone involved.

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