HR. Payroll. Benefits.

Measuring HCM Effectiveness:

The Advent of Universal Standards

As Human Capital Management (HCM) continues to grow as a strategic driver, decision-makers are increasingly in need of standardized metrics — tools to measure effectiveness, support organizational strategy and guide informed decision-making.

The Society for Human Resource Management (SHRM) and American National Standards Institute (ANSI) are working together to define a set of universal HCM standards for the U.S. Concurrently, the International Organization for Standardization (ISO) is developing international HCM standards.

ADP is proud to take a leadership role in this groundbreaking project, serving as technical advisor for ANSI. In addition, ADP is leading ISO’s international HCM metrics development group.

ANSI has released three HCM standards to date, including workforce planning, cost per hire and

workplace violence prevention and intervention. ISO will release cost per hire as a new international standard in September 2013.

By determining a set of universal HCM metrics, employers worldwide will gain valuable visibility into the effectiveness of their HCM efforts, as well as the ability to benchmark across the corporate and non-profit spectrum.

To download the latest standards or learn how you can participate in standards development, visit: shrm.org/HRSTANDARDS

The Top 5 Most-Wanted MetricsA new study from the ADP Research Institute identifies the metrics rated most important by HR professionals in evaluating the effectiveness of their HR function:

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Companies with 1,000+ employees

Employee turnover 57%

Cost of benefits 61%

Cost of labor 62%

Employee performance 59%

Compensation competitiveness 55%

Cost of benefits

Employee performance

Compensation competitiveness

Companies with 100-999 employees

72%

Employee turnover 56%

Cost of labor 65%

54%

53%

When tasked with measuring HCM effectiveness, most companies tend to consider the complete employee lifecycle. A measurement or “metric” can therefore span recruitment to retirement and everything in between.

ADP’s solutions simplify the process of producing key metrics, using both the ANSI and ISO standards to benchmark performance across organizations.

Because sound decision-making begins with access to key data points, ADP is working closely with ANSI and ISO to ensure our systems incorporate the latest standards prior to public release. You gain access to fully customizable business intelligence tools like these:

• Dashboards that combine metrics from all HCM, including HR, Talent, Compensation, Benefits and Time & Attendance, in one easy-to-read view

• Comparison of metric results to industry benchmarks based on real transactions

• Pre-configured with answers to critical HCM questions, featuring industry standard metrics as well as the ability to customize based on client needs

• Ability to mash-up data from multiple sources to answer additional business questions

• Support for benchmarking against peers, using industry standard metric definitions

The ADP Research Institute® will also shortly release benchmarks based on anonymous aggregated data from a large sample of ADP’s clients. Based on actual transactions rather than survey data, these benchmarks will represent the most accurate and far-reaching information available.

Gauging HCM success from hire to retire

Results based on an ADP Research Institute online survey of HR decision makers conducted in September 2012. There were 460 total responses received with 258 respondents in companies with 100-999 employees and 202 responses from HR decision makers in companies with 1,000 or more employees.